MISSISSfPPi 


BU8JNESS  SfDE  OF  FARMING 


19  14 


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BULLETIN        \:^C  "  °'- 


DEPARTMENT  OF  MARKETS 
AND  RURAL  ECONOMICS 


A.  &  M.  COLLEGE  OF 
MISSISSIPPI 


June  20,  1914 


The  Business  Side 
of  Farming 


T.  J.  BROOKS 

Professor  of  Markets  and  Rural  Economics 


WPRTHAW    FBINTING  COMPANY      MERIDIAN,    MISS 


f)i 


INTRODUCTION.       '^ 


The  farmer  is  a  manufacturer:  The  soil,  atmosphere,  sunshine 
and  showers  are  the  materials  to  which  he  applies  his  skill,  and  from 
nature's  laboratory  is  poured  annually  into  the  channels  of  trade  the 
materials  from  which  is  fed  and  clothed  the  teeming  millions  of  the 
earth. 

The  farmer  is  a  business  man:  The  selling  of  his  surplus  is  the 
great  paramount  source  of  the  world's  commerce  ana  trade.  He 
furnishes  600,000,000  tons  of  food  annually  to  feed  the  nations  of  the 
earth. 

The  farmer  is  a  consumer  of  the  materials  turned  out  by  the 
great  urban  industries.  He  interchanges  his  products  with  those  ot 
other  lands  till  all  the  nations  of  earth  are  linked  together  into  one 
stupendous    whcle. 

History  is  a  voice  forever  sounding  across  the  centuries  the  in 
terpretations  of  man.  Opinions  alter,  manners  change,  creeds  rise 
and  far,  but  the  law  of  cause  and  effect  is  written  on  the  tablets  of 
eternity. 

To  trace  the  law  of  cause  and  effect  in  the  past  for  future 
guidance  is  a  task  of  civilization.  Present  conditions  are  the  com- 
posite reflection  of  the  operation  of  this  law.  Present  tendencies  are 
prophetic,  and  to  properly  interpret  is  to  be  forearmed  and  empow- 
ered to  direct  the  course  of  history. 

The  farmer  of  today  is  going  through  a  period  or  transition, 
economically,  industrially  and  financially.  How  to  adjust  his  method-?, 
habits  and  business  to  the  changing  order  is  one  of  tne  difficuii 
problems  of  the  day  which  he  alone  can  solve.  To  help  in  this  task 
is  the  prime  object  of  this  Bulletin. 

The  consumer  furnishes  the  demand  for  production.     He  pays  for 
-  tjp.         (1)     Cost  of  production. 
^J^^  ^c9\<2)     Cost  of  distribution. 
^    xC    ^^      (3)     Profits   of  production. 
xoW^**  (4)     Profits  of  distribution. 

^  (5)     Waste  of  production. 

(6)  Waste  of  distribution. 
The  ability  to  consume  is  guaged  by  the  power  to  earn.  When  so 
much  of  the  consumers  earning  power  goes  to  defray  the  expense  of 
waste  his  consuming  power  is  curtailed  and  the  market  he  can  furnish 
the  producer  is  less.ened.  It  be;hocFes  both  the  producer  and  con- 
sumer to  eliminate  waste,  ' 

The  best  statistics  obtainable  iijform  us  that  proauction  and 
distribution  'kre  9^9^-ii  eqiia^  factofs  in  establishing  the  retail  price 
to  the  ultimate  consumer.  Wc  know  i^at  this  can  be  greatly  cheap- 
ened by  the  producer  assuming  a  larger  share  in  the  task  of  distribution 
along  lines  demonstrated  to  be  practical,  efficient  and  economical  by 
the  larger  distributing  concerns  of  the  leading  nations  of  the  world. 

There  are  two  general  divisions  of  business  methods: 

(1)     Individual. 


(2)     Collective.  '  '  ^ 

The  individual  method  has  been  followed  almost  universaly  from 
the  very  earliest  to  very  recent  times.  The  development  of  modern 
machinery,  the  corporation  and  the  trust  has  eliminated  this  method 
in  the  larger  affairs  of  the  business  world.  There  is  no  individual 
distribution  by  those  who  hire  for  wages.  They  do  not  own  the 
things  they  produce.  The  distribution  is  undertaken  by  the  firm  or 
company  owning  the  output.  The  workers  in  a  shoe  factory  think  not 
of  marketing  the  shoes  they  produce.  This  is  done  by  the  factory 
owners;  not  as  individuals  either  but  by  distributors  under  the 
direction  of  the  owners. 

The  same  is  true  of  the  manufacture  of  machinery,  furniture, 
vehicles,  mining,  etc.  A  railroad  has  service  to  sell  but  the  ones  who 
perform  the  individual  service  on  the  road  or  trains  are  not  the 
ones  who  set  the  price.  This  is  the  work  of  the  corporate  body 
endowed  by  law  with  the  powers  of  a  personal  entity. 

When  farming  is  done  on  the  bonanza  scale  the  same  process  ot 
marketing  is  followed:  The  individual  worker  sells  nothing  but  his 
service;  the  corporation  sells  for  all  the  workers  and  pays  a  stipulated 
wage  to  them.  , 

When  the  ownership  and  operation  is  on  the  small  scale  the 
business  is  at-  a  serious  disadvantage  in  competing  with  the  larger 
business,  both  in  power  to  handle  a  distributing  system  and  in 
economy  of  operation.  This  brings  the  farmer  of  tomorrow  face  to 
face  with  the  alternative  of  Collective  marketing  among  the  small 
farmers  or  gradually  retreat  before  the  corporation  farmer.  The  cor- 
poration has  superceded  the  individual  in  all  other  lines.  Even 
though  corporation  farming  is  outlawed  it  will  not  do  away  with  the 
need  of  collective  distribution. 

We  need  on!y  to  study  the  cooperative  movement,  as  It  Is  now 
progressing  on  both  sides  of  the  sea,  to  see  its  possibilities  and  under- 
stand the  details  of  its  principles.  What  we  do  is  mostly  a  matter  of 
choice  but  the  consequences  of  what  we  choose  to  do  are  meted  out 
to  us  with  cold  precision  as  destiny  swings  the  pendulum  of  time. 


320928 


MENTAL  ATTITUDE 

The  attitude  of  the  public  mind  toward  a  movement  is  the  greatest 
factor  in  determining  its  fate.  At  bottom  all  movements  are  questions 
of  education.  Impressions  may  hinder  or  help  without  being  Dased  on 
a  legitimate  foundation.  The  hope  of  free  institutions  lies  in  a 
thorough  understanding  of  the  facts  involved  in  the  vital  problems  ot 
each  day  and  generation.  Prejudice  often  closes  the  door  to  reason 
and  prepares  the  way  for  the  legitimate  fruits  of  retributTon. 

One  thing  confronting  those  who  wou'd  elect  to  help  inaugurate 
a  new  regime  is  the  impression  that  whatever  ills  we  now  endure  are 
not  of  our  making,  and,  therefore,  we  can  do  nothing  to  remedy  them. 
Not  feeling  to  blame  we  look  e'sewhere  for  the  source  of  the  trouble 
and  likewise  for  the  remedy.  This  looking  for  sometnmg  to  blame 
and  to  lean  on  enervates  and  destroys.  Looking  for  remedies  from 
without  rather  than  from  within  is  a  formidable  obstacle  in  the  way 
of  any  inovation.  Deferred  hope  ends  in  despair  when  self  help  is  at 
hand  but  ignored  for  a  will-o'-the-wisp.  An  ounce  of  self  help  is  worth 
a  ton  of  promises  of  demagogues.  We  like  the  instantaneous,  the 
spectacular,  but  the  regeneration  of  a  people  never  comes  that  route. 
Permanent  material  and  social  improvement  is  a  growth  from  within 
and  cannot  be  handed  down  from  anywhere. 

The  first  task  is  recognizing  the  agencies  at  hand  "or  self  help. 
The  second  task  is  appropriating  these  agencies  in  an  enicient  and 
effective  way. 

More  than  four-fifths  of  the  people  of  Mississippi  are  farmers,  and 
four-fifths  of  the  wealth  of  the  state  comes  from  the  soil.  The  state 
is,  broadly  speaking,  without  large  cities  with  the  industrial  spirit, 
such  as  is  found  in  the  great  manufacturing  and  mining  centers.  A 
train  of  influences,  both  natural  and  artifical,  have  led  the  people  to 
feel  that  they  are  the  victims  of  insect  pests  and  political  discrimina- 
tion and  that  help  must  come  to  them  and  not  from  them.  They  are 
inclined  to  regard  the  government  as  the  source  of  all  their  il's, 
other  than  the  depredations  of  the  weevil,  and  the  only  possible  source 
of  help.  When  the  unpalatable  alternative  of  organized  self  he^p  is 
offered  it  is  looked  upon  with  prejudice,  and  it  lacks  tne  charm  of 
a  promise  to  restore  that  which  has  been  allowed  to  leech  away  from 
the  producers  for  all  these  years. 

The  people  have  been  relying  principally  on  the  one  crop — cotton. 
The  depression  following  the  inroads  of  the  boll  weevil  has  left 
thousands  with  a  feeling  of  helplessness.  Many  are  leavmg  the  sec- 
tions suffering  worst  from  the  march  of  the  little  Mexican  invader. 
The  collective  system  has  superceded  home  production  in  all  the  arts 
and  crafts  industries.  The  only  way  the  small  man  can  avail  himself 
of  modern  appliances  and  agencies  of  distribution  is  by  the  collective 
ownership  of  such  agencies  and  plants  as  are  necessary  for  the 
assembling,  preparing  and  distributing  of  his  products. 

Those  who  first  suggest  inovations  requiring  an  outlay  of  money 
and  a  change  of  long-established  habits  and  methods  are  suspected 
of  sinister  motives — this  can  be  lived  down.  But  the  real  difficulty 
of  the  farmers  is  their  distrust  of  each  other  and  lacK  of  faith  in 
themselves. 

The  discouraging  critic  is  always  handy,  saying  that  you  c^n 
arouse  the  farmer  on  politics,  religion  and  war  but  thai  you  cannot 
hold  him  to  a  voluntary  association  of  humdrum  business,  nor  make 


a  success  of  enterprises  based  on  democratic  management  rather  than 
on  the  poicy  of  one  man  control.  We  hope  to  make  it  easy  for  those 
who  have  not  made  these  things  a  special  study  to  understand  the 
principles  involved  and  the  methods  of  their  application.  All  should 
know  the  modus  operandi  of  a  business  guaranteeing  each  participant 
his  equity  in  the  control,  risk,  responsibility,  and  profit  that  go  with 
the  enterprise. 

Land  is  not  the  only  factor  in  agricultural  production :  it  also 
takes  capital  and  labor.  All  three  of  these  do  not  necessarily  mean 
successful  farming.  There  must  be  sagacious  business  management 
of  the  farm  and  of  distribution  of  farm  products — markeung. 

If  every  farmer  were  a  home  owner  it  would  simplify  matters 
immensely  but  it  would  not  at  all  solve  the  rural  problem. 

A  government  has  a  head  to  it;  when  you  deal  with  the 
head  you  deal  with  the  government.  A  corporation  has  a 
head;  when  you  deal  with  the  head  you  deal  with  the  corporation. 
An  incorporated  town  has  a  governmental  head;  when  you  deal  with 
the  head  you  deal  with  the  whole  town.  The  country  community 
has  no  head;  it  has  no  source  of  authority;  no  composite  method  of 
action;  no  organic  entity.  Neither  has  it  any  Industries  to  give  em- 
ployment to  the  people  between  the  crop  seasons  when  the  country 
people,  especially  the  renter,  could  work  and  utilize  many  spare  days. 
Diversification  and  live  stock  will  help  this  greatly  and  the  develop- 
ment of  business  associations  will  act  as  a  welding  force  m  community 
life.  There  should  be  dairies,  syrup-blending  plants,  broom  factories, 
canning  enterprises,  bacon  factories,  selling  exchanges,  etc.,  to  create 
community  interests,  utilize  time  and  hold  money  In  the  country 
now  exported  by  the  miUions  for  products  that  could  be  as  readily 
produced  here  as  elsewhere.  The  experience  and  discipline  gained  and 
the  community  interest  built  up  would  have  a  rejuvenating  effect  on 
country  life.  The  definition  of  "neighbor'  was  given  two  thousand 
years  ago;  another  way  of  defining  it  is  "the  one  interested  in  the 
same  things  you  are."  These  enterprises  should,  one  and  all,  be  owned 
and  controlled  by  the  farmer.  He  shou'd  develop  the  commercial  end 
of  farming  the  same  as  the  commercial  end  of  manufacturing  has  been 
developed. 

With  the  farmer  looking  at  these  things  in  the  proper  attitude  of 
mind  they  will  be  brought  about,  otherwise  they  will  not. 


CORPORATE    BUSINESS 

There  are  three  methods  of  conducting  Corporate  Business. 

1 — The  ordinary  joint-stock  method. 

2 — The  Copartnership  or  profit-sharing  method 

3 — The  cooperative  method. 

Let  us  take  them  up  in  the  order  named  and  study  the  essential 
qualities  of  each.  The  process  of  securing  a  charter  is  the  same  in 
all  three  kinds. 

The  first  was  originally  the  only  kind  organized.  This  class  has 
but  one  purpose:  the  welfare  of  the  stockholder.  All  net  profits  are 
considered  the  rightful  property  of  the  stockholders.  The  voting  power 
is  lodged  in  the  shares.  The  shareholders  may  vote  for  the  Board  ol 
Directors  or  other  officers.  The  voting  power  may  belong  exclusively 
to  the  ho'ders  of  common  stock  or  may  extend  to  the  preferred  stock. 
It  may  have  both  preferred  and  common  or  all  may  be  common.  It 
may  have  a  voting  Board  which  has  all  the  voting  powers.  In  either 
case  the  profits  go  to  the  stockholders.  Most  of  our  industrial  cor- 
porations are  of  this  kind.  The  defense  for  this  type  of  corporation  is 
that  those  who  assume  the  risk  of  failure  and  have  their  money 
invested  are  due  whatever  returns  the  business  may  net. 

The  second  class  of  corporations — the  profit-sharing — goes  one 
step  further  and  allows  a  certain  percent  of  the  profits  to  go  to  the 
employees  in  addition  to  their  wages,  the  bonus  to  be  pro  rata,  based 
on  the  salary  or  wages  of  each.  This  is  calculated  to  tie  the  employees 
to  the  company  and  encourage  the  "spirit  of  the  shop"  till  strikes  will 
be  a  thing  of  the  past.  This  plan  is  calculated  to  make  the  employees 
feel  that  they  are  getting  a  square  deal  and  they  will  have  no  desire  to 
destroy  the  business  that  gives  employment  and  gives  them  all  that  the 
profits  will  justify.  This  p  an  is  coming  in  favor  with  quite  a  few 
large  employers. 

The  third  kind  or  cooperative  corporation  goe3  still  one  step 
further  and  includes  the  three  absolutely  essential  factors  in  the 
operation  of  any  business:  the  stockholder,  the  employee  and  the  cus- 
tomer. Neither  is  more  important  than  the  other  and  neither  should 
have  all  the  benefits  of  success.  In  the  distribution  of  profits  the 
cooperative  corporation  limits  the  profits  that  go  to  the  stockholder 
just  as  profits  are  'imited  to  a  bond-holder.  After  paying  expenses 
the  stockholder  is  a  preferred  creditor  up  to  the  rate  which  is  estab- 
lished as  the  rate.  Next  comes  the  employees  and  customers.  The 
employees  get  a  certain  percent  pro  rata,  based  on  the  earning  of  each. 
The  remainder  goes  back  to  those  furnishing  the  business.  If  it  is 
a  mercantile  business  the  refund  goes  to  the  purchaser  of  goods  in 
proportion  to  value  of  purchases  by  memoers.  Outside  customers  get 
one  half  the  rebate  of  members  which  may  be  credits  till  they  amount 
to  a  share  and  then  a  share  may  be  issued.  If  it  is  a  selling  associa- 
tion commissions  are  charged  to  cover  expenses  and  a  reserve;  when 
this  has  reached  a  specified  standard  the  profits  are  returned  to  those 
furnishing  the  shipments,  to  each  according  to  the  profits  yielded  by 
his  shipment. 

In  the  control  it  is  usually  one  man  one  vote  regardless  of  the 
number  of  shares  owned.  In  a  few  instances  the  members  vote 
according  to  the  volume  of  business  furnished — so  much  business 
counting    a   vote.      The    same    principles    apply    whether    the    articles 


handled  are  eggs,  poultry,  live  stock,  dairy  products,  fruit,  vegetables, 
wheat,  cotton  or  what  not.  Farmers'  Exchanges  never  deal  in  futures 
subject  to  settlement  by  forfeiture  of  margins. 


8, 


Magnitude  of  Co-operative  Business. 

Cooperation  as  applied  to  business  in  the  modern  sense  is  of 
comparatively  recent  origin.  It  has  its  beginning  in  the  first  half  or 
the  Nineteenth  Century.  Its  more  recent  developments  indicate  a 
hea'thy  and  permanent  growth  in  competition  with  other  systems 
long  in  vogue  and  permanently  entrenched  behind  custom,  habit  and 
law. 

A  Few  Instances  Showing   [ts  Magnitude. 

Cooperative  banking  in  Germany  has  reached  the  enormous  annual 
turn  over  of  $6,000,000,000! 

Cooperative  merchandising  and  industrial  business  in  England 
has  reached  the  $555,000,000  mark  operating  under  one  system,  with 
the  wholesale  department  aggregating  $150,000,000  a  year. 

Cooperative  banking  and  purchasing  in  France  runs  into  the 
hundreds  of  millions  annually. 

Cooperation  is  so  extensive  in  Denmark  that  on  the  average 
every  famer  at  the  head  of  a  family  is  a  member  of  four  cooperative 
associations. 

Cooperation  in  Italy  has  invaded  agricultural  production  and  the 
public  industries.  Renters  are  buying  land  cooperatively.  Wage-earn- 
ers do  their  own  contracting  and  employing  cooperatively,  thus  doing 
away  with  strikes. 

Cooperation  is  gaining  on  other  methods  of  business  throughout 
Europe,  from  Dublin  to  the  Dardenelle  and  from  Lisbon  to  Moscow. 

Cooperation  in  America  has  developed  mostly  along  the  line  of 
selling  agricu  tural  products.  We  have  1,268  cooperative  dairies  in 
three  states — Minnesota,  Wisconsin  and  Iowa.  We  have  350  coopera- 
tive cheese  factories.  (The  creameries  average  about  800  cows;  fewer 
than  500  will  not  justify  establishing  one.)  There  are  6,300  creameries 
in  the  United  States.  The  dairy  products  of  Wisconsin  alone  are 
worth  about  $90,000,000  a  year. 

Minnesota  has  275  cooperative  elevators;  Iowa  290;  South  Da- 
kota 260;  Illinois  has  300,  some  of  which  are  conducted  on  the 
cooperative  basis  through  a  "gentlemen's  agreement"  for  lack  of 
proper  laws  governing  cooperatice  corporations.  A  member  of  the 
Chicago  Board  of  Trade — five  times  the  largest  grain  pit  in  the  world 
— Mr.  Stickney,  of  Lowell  Hoit  &  Co.,  gays  that  "the  farmers  of  Illinois 
save  $9,000,000  a  year  by  owning  and  operating  cooperatively  their 
own  e.evators.  *  *  a  greater  benefit  than  the  monetary  side  has 
come.  Everybody  is  becoming  a  student  of  cooperation,  a  topic  that 
overshadows  all  other  questions."  Unusual  to  come  from  the  largest 
speculative  grain  exchange  in  the  world.  We  have  some  $20,000,000 
invested  in  farmers'  elevators  handling  between  two  fifty  and  three 
hundred  million  dollars  worth  of  garin  annually. 

The  California  Fruit  Growers  Exchange  has  a  total  business  of 
$20,000,000  a  year.  It  is  run  strict  y  as  a  cooperative  exchange.  The 
California  walnut  growers  market  cooperatively  as  much  as  $2,000,000 
worth  in  a  year — all  cooperatively. 

Colorado  sells  cooperatively  $2,000,000  worth  of  fruit  each  year — • 
mostly  apples. 

The  East  Shore  of  Virginia  Produce  Exchange,  a  truck  farmers' 
exchange,  markets  $4,000,000  worth  of  truck  farm  products  annually. 
It  ships  a  car  of  potatoes  for  every  hour  in  the  year. 


Copying  the  Economics  of  Big  Business. 

All  these  examples  of  successful  cooperative  business  exemplify 
the  possibility  of  conducting  the  distributive  end  of  farming  on  the 
sam.e  principles  that  are  followed  by  the  big  industrial  corporations 
and  trusts  without  the  monopolistic  extortions  for  the  benefit  of  a  few 
stockholding  exploiters. 

Cooperative  business  means: 
1 — One  member  one  vote. 

2 — Stockholders  limited  in  profits  like  bondholders, 
3 — Distribution  of  net  profits  to  customers  and  employees. 
4 — Power    to    regulate    membership    and    control    transfer    o£ 
stock. 


10 


Individual  Marketing. 

Individual  marketing  is  still  practiced  by  a  majority  of  farmers. 
In  the  absence  of  favorable  conditions  for  collective  marketing  indi- 
vidual marketing  must  be  practiced.  This  can  be  done  to  different 
degrees  of  efficiency.  We  make  some  suggestions  wnlcii  may  be 
approximated  by  those  who  would  do  more  than  merely  haul  their 
produce  to  the  nearest  town  and  "get  rid  of  it"  the  easiest  way  possible. 

General  remarks  are  of  but  little  practical  service.  Each  kind  of 
product  to  be  sod  requires  a  different  detail  of  business.  If  you  are 
to  venture  to  get  a  larger  share  of  the  price  paid  by  consumers  you 
must  find  your  own  market.  You  must  utilize  the  personal  equation 
as  is  done  in  all  the  walks  of  life,  you  must  "work  up"  customers. 
There  are  but  two  methods  of  doing  this:  by  personal  contact  and  by 
correspondence.  Whether  you  can  be  your  own  drummer  and  visit 
the  available  markets  depends  on  your  nearness  to  the  place  and  your 
volume  of  business. 

Suppose  you  wish  to  sell  your  eggs  to  a  better  advantage  than 
your  local  market  offers,  and  your  supply  is  not  large  or  constant,  and 
you  have  no  local  association  for  marketing  eggs;  there  is  only  one 
recourse — the  correspondence  method.  Your  first  task  is  to  get  a  list 
of  the  hotels,  boarding  houses,  hospitals,  restaurants,  and  private 
families  with  whom  you  open  up  a  correspondence,  make  your  offers 
and  guarantee  of  fresh  quality  and  prompt  shipments.  You  must 
provide  yourself  with  proper  equipments  for  shipping  oy  express  or 
parcels  post.  After  you  establish  a  trade  and  satisfy  your  customers 
your  great  trouble  will  be  to  furnish  a  constant  supply.  Your  cus- 
tomers are  apt  to  be  more  regular  in  their  demands  than  your  hens 
are  in   supply. 

The  same  course  is  open  if  it  is  butter  you  have  to  sell.  It  is  the 
same  if  vegetables.  Getting  a  customer  in  one  may  lead  to  you  holding 
him  as  a  customer  for  the  other.  Your  protection  will  be  the  local 
market  with  which  your  customer  will  aJways  compare  your  prices. 
This  is  sure  to  be  on  the  average  higher  than  the  average  price  at 
your  station  if  a  small  town,  but  it  may  frequently  happen  that  the 
small  town  is  a  better  market  than  the  big  city  because  of  the  crowd- 
ing of  the  larger  markets.  Every  one  who  thinks  of  shipping  thinks 
of  the  big  cities  and  the  medium  size  city  is  overlooked. 

If  it  is  live  stock  you  have  to  sell  you  must  have  car  shipments  to 
justify  shipping  individually.  The  finding  of  individual  customers  is 
out  of  the  question,  in  the  sale  of  live  stock  for  slaughter.  Whether 
you  ship  individually  or  collectively  through  an  association  live  stock 
are  shipped  to  some  one  who  has  a  stall  rented  at  the  stock  yards,  or 
they  are  billed  to  the  shipper  himself.  The  shipper  can  bill  the  car 
to  himself  and  go  along  with  them.  They  are  turned  over  to  the 
stock  yards  company — a  corporation  owning  the  stock  yards — whic>i 
receives,  feeds  and  waters  them  at  a  stated  charge.  The  owner  can 
pick  out  his  commission  man  to  sell  them  for  him,  he  can  not  sell 
them  himself.  These  commission  men  have  pons  rented  and  do  a'' 
the  selling.  If  the  owner  does  not  go  himself  he  ships  to  one  of  these 
commission  men  whose  name  he  gets  out  of  ads  in  stock  journals  or 
otherwise.  When  cattle,  sheep  or  swine  are  placed  in  the  pen  of  any 
sales  agent  he  sells  them  as  he  sees  fit.  He  may  sell  immediately  or 
hold  them  over,  in  bunchej-  or  one  at  a  time.  For  his  trouble  he  gets 
50c  a  head,  regardless  of  the  value  of  the  animal,  or  a  stated  coia- 


11 

mission. 

If  you  ship  produce  to  a  municipal  market  the  process  is  prac- 
tically the  same.     Stalls  are  rented  by  produce  venders  and  they  sp' 
on  commission  for  customers  who  ship  to  them,  and  buy  outright  and 
sell  to  their  city  customers. 


12 


Municipal  Markets. 

By  municipal  markets  Is  meant  city  markets  owned  and  operated 
by  the  municipality.  Corporations  and  shrewd  business  men  do  things 
more  economicaly  than  governments.  Bureaucracy  is  the  bane  of 
governmental  cooperation.  When  a  municipality  takes  the  distribu- 
tion of  its  food  supply  under  its  control  it  is  open  to  the  objection 
inherent  in  sumptuary  regulation. 

On  the  other  hand  if  we  go  to  the  other  extreme  of  "free  streets,' 
"open  air  markets,"  and  "push  cart  freedom"  we  have  the  oldest  and 
crudest  way  possible  preserved  through  all  the  changes  of  the  ages. 
When  the  push  cart  peddlers  scramble  for  the  pittance  of  profits  and 
country  growers  compete  for  trade  we  have  a  system  based  on  the 
peasant  class  idea  without  regard  to  sanitation,  uniformity  of  price, 
standardization  of  markets  or  ultimate  industrial  effects.  The 
economic  efficiency  possible  under  this  system  is  entirely  dependent 
on  the  poverty  and  low  standard  of  living  of  those  competing  for  the 
trade.  The  system  demands  slaves  fighting  for  existence  on  the  basis 
of  a  savage's  standard  of  consumption.  The  plan  cares  nothing  for 
the  creatures  bidding  for  this  means  of  a  liveliehood.  It  demands  vic- 
tims for  the  sake  of  an  apparent  advantage.  It  demands  slavery  just 
as  much  as  did  the  rankest  feudalism.  To  argue  that  it  gives  em- 
ployment and  that  these  people  can't  do  anything  else  is  just  as  well 
taken  as  the  claim  that  was  urged  in  defense  of  slavery  In  every 
age  of  the  world. 

Scores  of  American  cities  have  established  some  form  of  municipal 
markets.  There  are  thirty  cities  with  a  population  of  over  a  hundred 
thousand  each  that  have  established  these  markets.  Many  of  the 
leading  cities  of  Europe  have  municipal  markets.  Some  cities  own 
market  houses  but  do  not  operate  or  supervise  them — this  is  not  a 
municipal  market. 

The  variations  of  detail  are  so  numerous  that  we  cannot  go  into 
a  full  discussion  of  each  type.  Some  cities  conduct  both  a  wholesale 
and  a  retail  business  and  others  only  retail.  City  markets,  especially 
wholesale,  should  be  located  near  railroad  terminals,  and  if  the  city  is 
on  a  waterway,  as  near  as  possible  to  the  water  front.  This  favorable 
location  saves  enormous  expense  in  carting  from  cars  and  boats  to 
market  places,  some  going  to  the  wholesale  depots,  some  to  the  re- 
tail stations  and  some  back  to  cars  or  wharfs  for  reshipment. 

These  markets  receive  shipments  from  country  merchants  and 
truck  growers  and  associations.  When  shipments  are  received  the 
market  employees  open,  assort  and  if  necessary  repack;  the  stuff  is 
sold  to  the  local  retail  merchants,  commission  men  and  to  groups  ot 
consumers  who  buy  in  quantities.  The  retail  markets  are  equipped 
with  stalls  which  farmers  and  retail  merchants  rent  from  the  city 
In  the  most  up-to-date  markets  a  cold  storage  is  operated  where 
venders  may  rent  space  for  any  perishable  produce  that  fails  to  se'j 
at  once.    The  city  uses  the  rest  to  operate  the  market. 

In  addition  to  the  covered  market  there  are  open  air  markets  and 
curbstone  markets  where  wagon  space  is  rented  for  a  small  fee  to 
farmers  and  other  vendors.  These  markets  are  patronized  by  retail 
and  commission  men  and  consumers.  In  the  municipal  markets  the 
widest  range  of  eatables  are  offered  for  sale.  All  available  farm  vege- 
tables, dairy  products  and  meats   (land  and  water),  are  displayed  so 


13 

that  the  housekeeper  can  find  a  full  assortment  without  going  else- 
where to  complete  purchases. 

The  market  system  of  Paris  is  the  most  extensive  in  the  world. 
It  consists  of  a  central  wholesale  depot  and  many  smaller  retail 
markets  located  at  convenient  points.  The  Halles  Centralle  is  the 
center,  and  consists  of  ten  buildings  covering  twenty-two  acres,  all 
under  one  roof.  The  pavilions  and  three  half  pavilions  are  devoted 
to  a  wholesale  and  the  rest  to  a  retail  trade.  Produce  is  shipped  in 
from  all  parts  of  the  country  and  sold  at  wholesale,  at  auction  or  by 
private  sale,  to  retailers,  marketmen  or  consumers  buying  in  lots. 
Sales  are  conducted  by  licensed  commission  men,  appointed  by  the 
police,  the  commissions  are  fixed  by  law. 

Budapest  has  a  municipal  market  consisting  of  a  central  whole- 
sale and  six  retail  markets.  A  large  variety  of  merchandise  other  than 
foods  is  sold.  A  small  fee  is  charged  for  the  stalls,  which  are  raserved 
for  marketmen  and  producers.  Any  one  can  ship  produce  in  with 
perfect  assurance  that  he  will  get  a  square  deal.  Great  glass  tanks  oi 
fresh  water  are  kept  for  receiving  fish  shipped  in  alive  where  they 
can  be  fed  and  kept  indefinitely.  On  visiting  the  market  I  was  im- 
pressed with  the  sanitary  precautions  and  the  businesslike  aptitude 
disp  ayed  by  customers  when  making  purchases. 

The  Market  Commission  publishes  daily  bulletins  of  wholesale 
prices  and  weekly  bul  etins  of  retail  prices.  It  yields  a  large  commis- 
sion to  the  city. 

Among  the  leading  cities  of  the  United  States  wihch  have  munic- 
ipal markets  in  a  progressive  sense  may  be  mentionel  Baltimore, 
Cleveland,  Des  Moines,  Dubuque,  Houston,  Los  Angeles. 


14 


The  FederallOflice  of  Markets. 

In  February,  1912,  the  writer  handed  a  bill  to  Senator  Hoke  Smith 
of  Georgia,  providing  for  the  establishing  of  a  government  Bureau  of 
Markets,  with  the  request  that  he  assume  responsibility  for  it  in  the 
Senate  and  if  he  did  not  care  to  do  so  that  the  search  would  be  con- 
tinued till  one  was  found  who  would.  He  accepted  the  bill  and 
passed  it  through  the  Senate  Aug.  21,  1912.  It  went  to  the  House  and 
was  referred  to  the  Committee  on  Agriculture  which  made  a  favorable 
recommendation.  (The  name  had  been  changed  to  "Division  of  Mar- 
kets.") However,  instead  of  passing  the  bill  it  was  dropped,  and  an 
item  placed  in  the  appropriation  bill  authorizing  the  Secretary  of 
Agriculture  to  institute  the  work  on  his  own  initiative:  fifty  thousand 
dollars  was  placed  at  his  disposal  to  carry  on  the  work  and  twenty- 
five  thousand  dollars  were  made  available  to  work  on  the  cotton  mar- 
keting problem.     (The  name  it  now  bore  was  "Office  of  Markets.) 

In  the  act  making  appropriations  for  the  department  of  Agriculture 
for  the  fiscal  year  ending  June  30,  1913,  an  item  was  included  directing 
the  Secretary  of  Agriculture  to  secure  from  the  various  branches  of 
his  Department  reports  relating  to  the  systems  of  marketing  farm 
products,  cooperative  and  otherwise,  now  in  practice;  the  demand  for 
products  at  the  trade  centers  and  to  make  such  recommendations  as 
be  deemed  necessary.  In  the  report  made  to  Congress  in  response  to 
this  order  the  provisions  of  the  original  market  bill  were  fully 
vindicated. 

The  appropriation  bill  of  1914  increased  the  item  on  markets  to 
$200,000.00  to  continue  and  extend  the  work  begun.  So  that  the 
Office  of  Markets,  dovetailed  into  the  Department  of  Agriculture,  is  the 
newest  branch  of  federal  activity  and  is  only  a  year  old.  Its  primary 
purpose  is  to  ascertain  and  make  known  the  most  effective  and 
economical  methods  for  propertly  distributing  and  marketing  farm 
products. 

The,  principle  lines  of  investigation  pursued  during  the  first  year 
have  been: 

First — Cooperative  production  and  marketing. 

Second — Market  surveys,  methods  and  costs. 

Third — Market  grades  and  standards. 

Fourth — City   marketing  and   distribution. 

Fifth — Transportation  of  farm  produce. 

Sixth — Storage  problems. 

Seventh — Marketing   miscellaneous   products   and   collaboration. 

Eighth — Marketing  by  Parcels  Post. 

Ninth — Cotton  handling  and  marketing. 

It  is  now  working  on  the  problem  of  marketing  of  dairy  products. 

It  is  also  taking  up  the  study  of  marketing  live  stock  and  meats. 

The  Office  of  Markets  is  to  make  war  on  waste,  not  men  or  voca- 
tions. The  only  item  to  credit  is  efficient  service.  We  need  to 
develop  efficiency  engineers  in  business  as  well  as  in  mechanical 
construction.  The  farmer  must  learn  to  perform  the  function  of  those 
he  would  eliminate.  Unless  he  is  willing  to  do  this  his  complaints 
are  childish.  Unless  he  is  willing  to  take  up  the  slack  he  will  have  to 
bear  the  expense  incident  to  lost  motion. 

Investigation  in  the  local  cotton  markets  of  Oklahoma  showed 
great  loss  to  the  farmer  under  the  present  system  of  marketing  in  the 
failure  to   secure  the  premium   for  higher  grades   which   is   paid   by 


15 

exporters  and  spinners.  .  The  premium  for  the  higher  grades  being 
only  about  half  that  allowed  on  the  Exchanges. 

On  a  community  basis  the  workers  in  this  new  governmental  field 
are  urging  farmers  to  practice  cooperative  distribution.  The  market 
surveys  embrace  inquiry  into  available  market  supplies  in  production 
areas  and  demand  at  consuming  centers,  quantities  of  produce  in 
storage,  prices,  commission,  brokerage,  auction  and  other  methods  of 
marketing,  the  effect  of  exchanges,  increase  in  price  at  each  change  of 
hand  in  the  process  of  distribution,  the  part  that  transportation  plays 
in  marketing. 

The  Office  of  Markets  stands  for: 

Standardization  of  grades  and  containers; 

Elimination  of  waste; 

Maximum  efficiency. 

Among  the  essentials  of  successful  cooperating  in  the  selling  of 
farm  products  may  be  mentioned: 

1 — The  volume  of  business  must  be  large  enough  to  sustain  the 
business  by  paying  all  selling  expenses  at  a  very  low  charge. 

2 — There  must  me  a  proper  understanding  of  the  local  conditions, 
the  favorable  and  unfavorable  to  the  particular  project  contemplated. 
Availability  of  market,  stability  of  demand,  ability  to  fill  contracts  in 
case  the  business  requires  sale  before  shipments. 

3 — Stanndardization  of  product  and  guaranteeing  everything  ship- 
ped to  come  up  to  grade  or  be  of  the  quality  specified;  copyright 
trademark  for  protection  of  the  Association. 

4 — Legalized  Loyalty:  Securing  bonafide  contracts  from  the 
members  that  their  output  of  the  thing  to  be  handled  shall  go  through 
the  Association  or  pay  the  same  commission  on  the  sale  that  they 
would  have  paid  had  the  Association  handled  it, — or  require  that 
all  bids  be  turned  in  to  the  Association. 

5 — Efficient  local  leadership.  This  essential  must  not  be  ignored. 
Without  it  there  is  no  chance  to  succeed.  It  is  hard  to  secure,  at  the 
price  that  can  be  paid  when  the  business  is  small  and  the  membership 
need  so  much  coaching  in  details  and  discipline  in  compliance  with 
the  necessary  regulations. 


16 


By-Law^s  lor  E^^  Shipping  Assiociation. 

Declaration 

This  association  has  for  its  object  the  increasing  of  profits  of 
poultry  raisers  by  cooperation.     It  seeks  to  reach  its  object — 

(a)  Bl  standardizing  the  product  and  guaranteeing  quality; 

(b)  By  selling  direct  to  consumers  as  nearly  as  possible; 

(c)  By  buying   poultry   supplies   by  wholesale; 

(d)  By  a  better  understanding  of  the  poultry  business. 

This  local  association  shall  be  known  as  the  

and  may  become  a  member  of  the  General  Cooperative  Poultry 
Association  of  Mississippi  and  become  subject  to  the  rules  of  the 
General  Association. 

Application  must  be  made  to  the  Local  Association  and  upon 
approval  by  unanimous  vote  of  those  present  at  the  meeting  or  by  vote 
of  the  Board  of  Directors,  when  action  is  needed  between  meetings, 
shall  be  admitted  on  the  payment  of  the  fee  of  $1.00  which  is  to  go 
to  the  treasury  as  a  permanent  revolving  fund  to  be  used  by  the 
manager  for  incidentals  but  to  be  replaced  as  profits  are  received  from 
the  commissions  on  sales. 

Members  must  de  iver  all  of  their  eggs  to  the  individual  appointed 
to  receive  them  and  at  the  time  and  place  designated:  unless  otherwise 
ordered  the  time  sha  1  be  once  a  week  during  the  fall  and  winter 
months  and  twice  a  week  during  spring  and  summer  months. 

After  the  hatching  season  is  over  each  member  must  separate  the 
males  from  the  flock  that  the  eggs  may  be  infertile.  No  eggs  in  winter 
shall  exceed  seven  days  in  age,  and  in  summer  shall  not  exceed  four 
days  in  age.  Any  member  delivering  a  stale  egg  is  punishable  by  a 
fine  of  one  dollar  to  be  collected  by  the  directors.  The  Manager  shall 
instruct  the  members  how  to  candle  eggs  that  mistakes  may  easi  y  be 
avoided. 

The  eggs  must  be  collected  from  the  nests  each  day.  Eggs  of  un- 
known age  must  not  be  delivered  to  the  association.  Artificial  eggs 
must  be  used  for  nest  eggs,  and  no  egg  shall  be  offered  for  sale  through 
the  Association  that  a  hen  has  covered  for  one  night. 


Dirty  eggs,  eggs  below  the  average  in  size,  or  abnormal  in  shape 
must  not  be  deivered,  and  the  eggs  must  be  kept  in  a  warm  room  in 
winter  and  in  a  cool  dry  room  in  summer,  and  in  deivery  must  be 
protected  from  the  direct  rays  of  the  sun. 


Unless   by   special    permission   the   members    shall   not   put'chase 
eggs  for  delivery  to  the  association. 


Each  member  must  have  a  number  which  is  stamped  on  the  top 
end  of  each  egg.  Each  member  receives  on  the  payment  of  dues  a 
stamp  and  pad,  and  thirty  one-dozen  cartons  containing  the  name  of 
the  Association  on  the  cover.  Eggs  are  always  to  be  brought  in  those 
cartons  and  in  boxes  made  according  to  specifications  which  will  be 
given  by  the  Association. 


The  receiver  of  the  eggs  must  notify  the  member  of  the  eggs 
brought  by  him  not  suitable  for  shipment  and  save  them  for  him 
until  the  next  visit. 


17 

All  collections  must  be  made  by  the  receiver  who  is  to  be  allowed 
one  and  one  half  per  cent,  or  not  to  exceed  this  amount  for  handling 
the  eggs.  A  triplicate  pad  with  blanks  in  consecutive  numbers  must 
be  kept  by  the  collector,  one  sheet  must  be  given  in  to  the  customer, 
one  to  the  bank  where  the  deposits  are  kept,  and  the  tissue  paper 
sheet  in  this  book  must  be  kept  by  the  collector  for  his  own  files. 


Notice  of  withdrawal  must  be  given  to  the  Directors  thirty 
days  in  advance  and  no  member  who  withdraws  shall  have  any  share 
in  the  profits  or  equipment,  if  the  withdrawal  takes  place  before  the 
end  of  the  contract. 


The  Board  of  Directors  is  composed  of  three  members  elected  by 
the  Association, — the  chairman,  the  secretary  and  the  treasurer.  At 
least  two  of  the  directors  shall  be  ladies.  It  is  the  duty  of  the  Board 
to  see  that  all  regulations  are  complied  with,  find  markets,  and  audit 
the  books. 

If  for  any  reason  the  Association  should  be  dissolved,  the  surplus 
that  may  have  occurred  and  all  money  derived  from  the  sale  of  equip- 
ment shall  be  divided  among  all  members  in  good  standing. 


The   amount   of   the    reserve   fund   is   to   be    determined,  by    the 
Board  of  Directors. 

REFERENCES   TO    READ 
ON 
MARKETING    EGGS 
Powell,  Cooperation  in  Agriculture — pages  161-181. 
Poultry    Husbandry, 

Mar.  1913.    "On  the  Trail  of  an  Egg  Circle." 
June  1913.     "A  Study  of  Egg  Production." 

Cornell   Promoting  Cooperation. 
Sept.  1913.     "Most  Profitable  Way  to  Market  Eggs." 
The  Formation  of  Cooperative  Egg  Circles. 
Oct.   1913.     "The  Boosting  Power  of  Cooperation." 
Febr.  1914.     "The  Common  Good." 
Page   entitled   "The   Common   Good"  is  worth  reading   in   nearly 
every  issue  of  Poultry  Husbandry. 


Yearbook,  U.  S.  Department  of  Agriculture  1911,  pages  467-47>?. 
Bulletin  No.  132,  Minnesota  Experiment  Station. 

"Studies  in  Egg  Marketing" — By  C.  W.  Thompson. 
Bulletin  No.   141,   Bureau  of  Animal   Industry. 

"The  Improvement  of  the  Farm  Egg." 
Bulletin   No.   160,   Bureau  of  Animal  Industry. 

"The  Care  of  the  Farm  Egg." 
Circular  No.  140,  Bureau  of  Animal  Industry. 

"The  Egg  Trade  of  the  United  States." 
Farmers'  Bulletin  No.  445,  U.  S.  Department  of  Agriculture. 
Yearbook  U.  S.  Department  of  Agriculture  1912. 

Price  of  eggs  by  months,  page  686. 

Receipts  at  leading  markets,  page  688. 


18 


HoM^  to  Organize  a  Creamery 

When  the  farmers  of  a  community  decide  to  take  steps  toward 
organizing  a  Co  operative  Creamery  or  Cheese  Factory,  it  is  advisable 
for  them  to  call  for  assistance  from  the  State  Agricultural  College 

A  man  fami'iar  with  the  work  can  give  valuable  advice  and  in- 
formation in  the  way  of  organizing,  locating,  building  and  equipping 
the  factory. 

FIRST    MEETING 

A  temporary  chairman  and  secretary  should  be  elected.  The 
advisability  of  starting  a  creamery  or  cheese  factory  and  the  location 
of  same  should  be  discussed.  The  value  of  each  share  should  be 
decided  upon. 

If  it  be  deemed  advisable  to  form  an  association,  a  committee 
should  be  elected  to  canvass  the  surrounding  territory  to  ascertain 
if  there  are  a  sufficient  number  of  stockholders  and  cows  to  warrant 
organizing  an  association. 

ORGANIZATION,  AGREEMENT. 
To   Be    Used   at    First    Meeting. 

We,  the  undesigned   citizens  of County, 

State  of do  hereby  agree  to  form  ourselves  into  an 

association   for   the   purpose   of .,    and   to 

take   shares  of  stock,  at  the  rate  of   dollars 

each,  and  furnish  the  milk  or  cream  from  the  number  of  cows  set  oppo- 
fcite  our  names. 

New  members  may  come  in  by  signing  contract  to  be  furnished. 

Provided,  however,  that  if   cows  and    

stockholders  are  not  secured  before   19..,  this  agreement 

shall  be  null  and  voil. 


NAMES. 


SHARES. 


COWS. 


ARTICLES  OF   INCORPORATION    OF  CREAMERY. 

We,  the  undersigned  persons  hereby  become  associated  for  the 
purpose  of  organizing  a  co-operative  association  under  and  pursuant 
to  the  laws  of  the  State  of  for  buying,  selling,  manufactur- 
ing and  dealing  in  milk,  cream,  ice  cream,  butter  and  cheese  and 
generally  conducting  a  creamery  business,  v/ith  power  and  authority  to 
do  and  perform  all  acts  and  things  usually  requisite  and  necessary  in 
carrying  on  such  business,  and  have  organize'l  by  adopting  and  signing 
the  following  articles  of  incorporation: 

ARTICLE  I. 

The  name  of  this  Co-Operative  AssociaHon  shall  be   

The  nature  of  its  business  shall  be  buying,  selling,  manufacturing  and 
dealing  in  milk,  cream,  ice  cream,  cheese,  p.nd  butter,  and  handling, 
managing,  owning,  operating  and  controllinir  a  creamery  or  creameries 
in  the  usual  course  of  such  business,  and  to  do  and  perform  all  acts 
and  things-  usual,  requisite  and  necessary  r  n  the  premises,  and  the 
principal   place   where   the   business   of   sa  rl    co-operative   association 

shall  be  transacted  is  in  the ,  in  tho.  county  of and 

State  of It  shall  have  all  of  tho  power  of  a  body  politic, 

to  sue  and  be  sued,  own  real  and  personal  property  and  e^^ercise  sucU 
power  as  its  business  demands. 


19 

ARTICLE  11. 
The  time  of  commencement  of  said  co-operative  Association  shall 

be  the day  of 19 ,  and  the  period  of  its  continuancy 

shall  be  twenty  years. 

ARTICLE  III. 
The  amount  of  capital  stock  of  said  Co-operative  Association  shall 

be    dollars,  and  shall  be  divided  into    shares  of    

dollars  each,  and  shall  be  paid  at  such  a  time  and  in  such  manner  as 
the  By-Laws  of  this  Association  shaU  direct. 

ARTICLE  IV. 
The  highest  amount  of  indebtedness  or   liability   which   said   Co- 
operative  Association    shall    at    any   time    contract    shall    not    exceed 

dollars. 

ARTICLE  V. 
The  name  and  residences  of  the  persons  forming  this  Co-operative 

Association  are  as  follows,  to-wit : 

ARTICLE  VI. 
The  government  of  this  Co  operative  Association  and  the  manage- 
ment of  its  affairs  shall  be  vested  in  three  or  five  directors,  and  the 
following  officers  to-wit: 

A  President,  Vice-President,  Secretary  and  Treasurer,  and  such 
Directors  and  Officers  shall  be  e'ected  by  ballot  at  the  annual  meet- 
ing of  the  Stockholders,  which  shall  be  held  on  the  last  Tuesday  in 
January  of  each  year. 

ARTICLE  VII. 
The  names  of  the  Board  of  Directors  of  this  Co-operative  Associa- 
tion are  as  follows:     President,   ;  Vice-Presideni,   ; 

Secretary,   ;   Treasurer, ;   Directors,   

ARTICLE  VIII. 
The  aforesaid  Board  of  Directors  shall  hold  their  respective  offices 
until  their  successors  are  elected  and  qualified. 

ARTICLE  IX. 
This  Co-operative  Association  may  be  dissolved  at  any  regular  or 
special  meeting  of  the  stockholders,  provided  that  two-thirds  of  such 
stockholders  vote  for  the  dissolution,  and  each  stockholder  shall  have 
but  one  vote  in  person. 

ARTICLE  X. 
This  certificate  of  incorporation  may  be  amended  at  any  general 
meeting  of  the  stockholders  or  at  any  special  meeting  called  for  th 
purpose  upon  ten  days'  notice  to  the  stockholders. 

IN   TESTIMONY   WHEREOF,   We,   the   said    Incorporators,   have 

hereunto  set  our  hands  and  seals,  this day  of A.  D.,  19. . . 

IN  THE  PRESENCE  OF 

STATE    OF    

ss 

COUNTY    OF    

BE  IT  REMEMBERED  THAT  ON  THIS   day  of 

A.  D.,  19....   before  me,  a  notary  public  within  and  for  said  County, 

personally  appeared  to  me  known  to  be  the  persons 

described  in  the  above  and  foregoing  instrument  and  whose  names  are 
subscribed  hereto  and  severally  acknowledged  that  they  executed  the 
same  freely  and  voluntarily  for  the  uses  and  purposes  therein 
expressed. 

Notary  Public. 


BY-LAWS. 

The  President  shall  preside  at  all  meetings  of  the  Assoqis^tion.    In 


20 

his  absence  the  Vice-President  shall  preside;  if  both  are  absent,  a 
temporary  chairman  may  be  elected.  He  shall  have  power  to  ca  I 
a  special  meeting  of  the  Association  whenever,  in  his  judgment,  the 
business  of  the  Association  shall  require  it.  He  shall  also,  upon  a 
written  request  of  ten  stockholders  or  three  members  of  the  board  r 
diriectors,  call  a  special  meeting. 

2.  The  Vice-President  shall  perform  the  duties  of  the  President 
when  the  latter  is  absent  or  unab  e  to  perform  the  duties  of  his  office. 

3.  The  Secretary  shall  keep  a  record  of  all  the  meetings  of  the 
Association  and  make  and  sign  all  orders  upon  the  Treasurer  and  pay 
over  to  the  Treasurer  all  money  which  comes  into  his  possession, 
taking  the  Treasurer's  receipt  therefor.  The  Secretary  shall  make  a 
report  to  the  Association  at  its  annual  meeting,  setting  forth  in  detail 
the  gross  amount  of  milk  and  cream  receipts  and  the  net  amount 
of  receipts  from  products  sold  and  all  other  receipts,  the  amount  paid 
out  for  running  expenses,  the  sums  paid  out  for  milk  and  cream,  and  all 
other  matters  pertaining  to  the  business  of  the  Association.  A  like 
statement  shall  be  made  each  month  and  posted  conspiciousiy  in  t^- 
creamery  building  at  the  time  of  the  division  of  the  previous  month's 
receipts  aforesaid.  The  Secretary  shall  give  bonds  in  the  sum  of 
dollars,  same  to  be  approved  by  the  Board  of  Directors. 

4.  The  Treasurer  shall  receive  and  receipt  for  all  moneys 
belonging  to  the  Association,  and  pay  out  the  same  only  upon  orders 
signed  by  the  Secretary.  The  Treasurer  shaF  give  bond  in  the  sum 
of dollars,  same  to  be  approved  by  the  Board  of  Directors. 

5.  The  Board  of  Directors  shall  hold  at  least  one  meeting  every 
three  months  for  the  purpose  of  ascertaining  the  true  condition  of  the 
affairs  of  the  Association.  At  the  meeting  of  the  Board  of  Directors, 
no  other  person  shall  have  a  right  to  vote  but  the  Directors, 
unless  in  case  of  a  tie,  when  the  President  shall  be  authorized  to  cast 
the  deciding  vote. 

6.  A  sinking  fund  shall  be  provided  by  taking  from  each  pound 
of  butterfat  or  each  hundred  pounds  of  milk  delivered,  such  amount 
as  the  stockholders  may  vote  at  their  annual  meeting,  such  sinking 
fund  to  be  used  on^y  for  paying  insurance  and  taxes,  buying  new 
machinery,  and  for  erecting  new  buildings  or  improvement  of  bu' 
ings;  also  for  advancing  money  on  supplies,  and  for  paying  interest 
and  dividend  on  stock,  if  any  are  paid.  Provided,  however,  that  such 
a  sinking  fund  may  be  entirely  discontinued  for  a  time  if  the  Boar^' 
of  Directors  shall  decide  this  to  be  for  the  best  interest  of  the  Asso- 
ciation. 

7.  Each  stockholder  shall  furnish  all  the  milk  and  cream  from 
the  cows  he  has,  all  milk  and  cream  to  be  sound,  fresh  and  unadulter- 
ated, and  patrons  of  the  Association  not  stockholders  may  furni-'^ 
such  amounts  of  milk  or  cream  as  they  have.  The  Association  sha^' 
receive  and  sell  such  milk  or  cream,  manufacture  the  same  into 
butter,  cheese  or  ice  cream,  and  receive  all  money  from  the  products, 
and  from  money  so  received  deduct  such  a  percentage  thereof  as  sha  1 
have  been  agreed  upon  by  the  Association,  in  the  By-Laws  or  other- 
wise, and  deduct  the  running  expenses  of  the  creamery,  the  remainder 
thereof  to  be  distributed  among  the  stockholders  and  patrons  propor- 
tionately to  the  amount  of  who'e  milk  or  fat  furnished  by  each. 

8.  All  milk  or  cream  shall  be  delivered  at  the  creamery  of 
cheese  factory  during  the  forenoon  and  at  least  three  times  a 
week;  the  same  to  be  sweet  and  in  good  condition,  and  if  any  be  found 
otherwise,  the  operator  shall  reject  same.  The  operator  shall  preserve 
a  sample  of  each  delivery  of  each  patron's  milk  or  cream,  testing  sam^ 
at  proper  intervals. 


21 

P.  Any  person  sending  to  the  factory  any  impure  or  unhealthy 
milk  or  cream,  or  any  milk  drawn  from  cows  within  fifteen  days  before 
or  five  days  after  giving  birth  to  a  calf,  shall  upon  conviction  thereoi 
be  subject  to  a  fine  of  five  dollars  for  the  first  offense,  for  the  second 
offense  ten  dollars  and  for  the  third  offense  he  or  she  shall  forfeit  his 
stock  and  membership, 

10.  Salaries  of  all  officers  of  this  Association  shall  be  fixed  by  the 
stockholders. 

11.  The  Board  of  Directors  shall  have  full  authority  to  employ 
the  butter  or  cheese  makers,  and  all  other  help  needed  for  the  opera- 
tion of  the  factory. 

12.  Whenever,  from  any  cause,  a  vacancy  occurs  m  any  of  the 
offices  of  the  Association,  the  Board  of  Directors  shall  fill  by  appoint- 
ment any  such  vacancy,  and  the  person  so  appointed  shall  hold  the 
office  until  the  next  annual  meeting  of  the  Association,  and  he  sha 
have  the  same  power  and  be  subject  to  the  same  duties  and  liabilities 
as  the  officer  regularly  appointed. 

13.  All  shares  shall  be  paid  for  in  cash  or  by  bankable  note. 
When  a  note  is  given  to  the  Association  for  stock,  it  may  be  paid  by 
a  certain  percentage  deducted  from  each  pound  of  butterfat  or  each 
hundred  pounds  of  milk  delivered  by  the  stockholder.  Provided,  how- 
ever, that  no  certificate  shall  be  issued  nor  any  interest  paid  on  any 
share  of  stock  until  it  is  fully  paid. 

Be  it  further  provided,  that  all  stock  may  be  retired  as  fast  as 
money  accrued  from  the  sinking  fund  will  allow.  All  stockholders 
shall  receive  six  (6)  per  cent,  interest  on  their  stock  until  it  is  retired 
by  the  Association. 

14.  Notice  of  any  meeting  of  the  stockholders  of  the  Association 
shall  be  posted  at  the  factory  by  the  Secretary  at  least  ten  days 
before  such  meeting.  Three  days  notice,  posted  in  the  same  manner, 
shall  be  given  before  any  meeting  of  the  Board  of  Directors. 

Any  stockholder  or  patron  shall  have  the  privilege  to  appear  before 
the  board  at  any  of  their  regular  meetings  to  present  any  grievance 
or  any  other  matter. 

15.  Two-thirds  of  the  stockholders  shall  constitute  a  quorum  at 
any  meeting  of  the  Association.  A  majority  of  the  board  shall  con- 
stitute a  quorum  at  any  board  meeting. 

16.  If  any  competitor  raises  the  price  of  butterfat  above  its  mar- 
ket value,  any  stockholder  shall  have  the  right  to  sell  his  milk  or 
cream  to  such  competitor,  provided  that  the  cream  is  first  weighed 
and  tested  at  the  factory,  and  one  cent  per  pound  of  butterfat  is  paia 
to  the  Association  for  maintaining  the  creamery.  Violation  of  this  sec- 
tion shall  render  the  offender  liable  to  the  amount  of  one  per  cent, 
of  his  sales  to  the  competitor  against  his  stock  in  this  company. 

17.  These  By-Laws  may  be  amended  or  changed  at  any  annual 
meeting  of  this  Association  by  a  two-thirds  majority  of  the  stock 
holders  present  and  voting  thereon.  They  may  also  be  changed  by  a 
two-third  majority  of  the  stockholders  present  at  any  special  meeting 
of  the  Association  called  for  such  purpose.  A  notice  of  such  meeting, 
however,  shall  be  mailed  to  each  stockholder  at  his  last  known  address 
at  least  ten  days  before  such  meeting. 


Suggested  Form  ol  Constitution  lor  the  Organiza- 
tion of  Farmers'  Co-operative  Shipping 
Association. 

Article  1.     Name.    The  name  of  this  organization  shall  be 

Article  2.     Place.    The  place  of  the  operation  shall  be  in 

and  vicinity,   and  all   regular  and   special  meetings   shall   be  he'd   in 
as  prescribed   in   the   By-Laws. 

Article  3.  Time.  The  time  over  which  this  organization  shall 
extend  shall  be  twenty  years. 

Article  4.  Purpose.  The  purpose  of  this  organization  shall  be  to 
obtain  reasonable  prices,  and  to  secure  the  best  possible  results  in 
the  marketing  of  live  stock  and  farm  produce. 

Article  5.  Membership.  Any  person  r^aking  use  of  the  shipping 
facilities  of  this  association  shall  be  entitled  to  membership  by  pay- 
ing a  membership  fee  of 

Article  6.  Officers,  ^ihe  officers  of  this  Association  shall  be  a 
President,  Vice-President  and  a  Board  of  Directors,  who  sha  1  be 
elected  at  the  annual  meeting;  and  in  case  of  a  vacancy,  from  resig- 
nation or  otherwise,  the  Board  of  Directors  shall  appoint  a  successor, 
who  shall  hold  office  until  the  next  annual  meeting,  or  until  his  suc- 
cessor has  been  elected  and  qualified.  All  officers  shall  ho  d  oflice  for 
one  year,  or  until  their  successors  have  been  elected  and  qualified. 
The  Board  of  Directors  shall  appoint  a  manager  who  shall  act  as  Sec- 
retary and  Treasurer  of  this  Association. 

Article  7.  Management.  This  organization  shall  be  managed  by  a 
Board  of  Directors,  composed  of  five  members  of  the  Association,  who 
shall  be  elected  at  every  annual  meeting,  and  the  President  and  Sec- 
retary and  Treasurer  shall  be  members  of  this  board,,  and  said  officers 
shall  occupy  the  same  position  in  the  board  as  in  the  organization.  In 
the  case  of  vacancy  caused  by  resignation  or  otherwise  in  the  mem- 
bership of  the  board,  the  same  shall  be  filled  by  the  remaining  mem- 
bers of  the  board,  and  the  members  so  elect'id  shall  hold  office  for 
the  unexpired  term,  or  until  the  members  so  elected  shall  have 
qualified. 

Artie  e  8.  Amendments.  Amendments  to  this  Constitution  may 
be  made  at  any  regular  meeting,  by  a  two-thirds  vote,  when  thirty  day.? 
notice  of  the  tame  has  been  given  by  announcement  to  the  members. 

Article  9.  Quorum.  A  majority  of  mero.bers  of  the  board  shall 
constitute  a  quorum,  and  may  do  any  business  that  may  properly  come 
before  said  board. 

Article  10.  By-Laws.  By-Laws  and  rules  covering  the  operation 
of  this  Association  may  be  made  from  time  to  time  in  the  manner 
prescribed  for  the  amendments  to  this  Constitution. 


SUGGESTED    BY-LAWS    FOR   THE   ORGANIZATION    OF    FARMERS' 

CO-OPERATIVE    SHIPPING    ASSOCIATIONS     IN 

MISSISSIPPI. 

Chapter  1.  The  shipment  of  stock  in  this  Association  shall  be 
made  regardless  of  mem.bership,  and  the  delivery  of  stock  to  the  man- 
ager and  the  acceptance  thereof  by  him  binds  the  shipper  to  the  rules 
and  by-laws  of  this  Association.  All  who  desire  to  ship  stock  with  the 
Association  shall  report  to  the  manager  the  kind  of  stock,  the  number 
of  each  kind,  and  the  approximate  weight  of  each  when  it  is  ready 
to  be  marketed.  When  a  sufficient  amount  of  live  stock  has  been 
reported  to  be  ready  for  shipment  to  make  a  full  carload,  the  manager 


23 

shall  order  a  car  for  making  the  shipment,  and  shall  notify  each  party 
having  stock  listed,  and  state  at  what  time  the  stock  is  to  be  delivered 
for  loading. 

Chapter  2.  Section  1.  Duties  of  Marager.  The  manager  shall  be 
at  the  yard  on  the  day  the  shipment  is  to  be  made,  unless  he  shal 
have  secured  a  competent  substitute,  and  shall  receive  all  stock,  and 
weigh,  mark  and  load  the  same  on  the  car.  He  shall  have  charge  of 
and  direct  the  sale  of  all  shipments,  and  receive  all  money  therefor, 
and  pay  the  same  to  the  shippers,  less  his  commission  and  all  other 
expenses  incurred  in  making  the  shipment  or  when  so  directed  send 
the  money  by  mail  to  the  shippers.  He  shall  furnish  a  statement  to 
every  shipper,  showing  net  weight,  price  received  and  expenses  ot 
shipment.  He  shall  keep  on  file  a  comp'ete  statement  of  settlement, 
together  with  returns  from  commission  firm  selling  the  live  stock  for 
the  Association.  In  a  book  kept  for  that  purpose,  he  shall  keep  a 
record  showing  the  number  of  cars  shipped,  and  the  amount  of  stock 
in  such  cars,  during  the  year.  He  shall  also  keep  an  account  of  all 
disbursements  and  receipts  for  the  association.  At  the  annual  meet- 
iing,  he  shall  furnish  a  detailed  statement  of  all  business  done  during 
the  year. 

Section   2.     The   manager  shall   receive   as   compensation   for   his 

services  the  amount  of cents  per  hundred  pounds,  and  no  other 

compensation  from  the  association,  except  that  he  shall  have  the  right 
to  charge  for  any  outlay  for  materials  needed  in  making  partitions  to 
separate  the  stock  in  the  car  and  for  bedding,  said  amount  to  be 
charged  to  the  expense  of  the  shipment  for  which  it  was  incurred. 

Section  3.     The  manager  shall  furnish  a  satisfactory  bond,  wh 
shall  be  approved  by  the  Board  of  Directors.     Said  bonds  shall  be  for 
the  faithful  discharge  of  his  duties. 

Chapter  3.  Section  1.  Protection  Fund:  There  shall  be  deducted 
on  every  hundred  pounds  of  weight  of  hogs  and  sheep,  three  cents,  and 
for  every  hundred  pounds  in  weight  of  cattle,  two  cents,  and  the  same 
shall  be  placed  in  the  sinking  fund,  to  be  used  for  tbe  paying  of  losses 
that  may  occur  to  any 'stock  from  the  time  it  comes  in  the  hands  of 
the  manager  until  final  disposition  of  same  is  made. 

Section  2.  Losses — How  Paid:  Any  shipper  whose  stock  has 
been  damaged  by  injury  while  in  the  hands  of  the  manager,  shall  re- 
ceive the  full  amount  for  same  as  though  the  stock  had  not  been 
injured,  but  shall  be  subject  to  the  same  ratio  of  expense  on  the  ship- 
ment. The  payment  of  the  damage  shall  be  based  on  a  state- 
ment made  by  the  commission  firm  having  charge  of  the  ship- 
ment, which  statement  shall  show  the  amount  received  for  the  in- 
jured animal,  the  amount,  in  their  opinion,  it  would  have  brought  had 
it  not  been  injured.  This  statement  shall  be  the  final  basis  for  the 
settlement.  No  damage  shall  be  paid  for  an  animal  which  was  not  in 
a  healthy  condition  when  received  at  the  local  yards  by  the  manager. 

Chapter  4.  Section  1.  Unhealthy  Stock:  All  stock  which  must 
be  sold  subject  to  inspection,  except  such  as  has  been  injured  while 
in  a  heaUhy  condition  and  in  charge  of  the  manager,  or  any  diseased 
animal,  shall  be  received  at  the  owner's  risk,  and  he  shall  receive 
payment  therefor  as  is  received  by  the  commission  firm,  less  alL  ex- 
penses figured  pro  rata  on  the  shipment. 


24 


Business  Forms 


P.  O.  7 


Date,  August  23,  1914. 


Received  from  T.  O.  Anderson,  1  mark. 

4  Hogs,  850  pounds. 
1  Sow,  420  pounds. 

1  Cow,  1100  pounds,  X. 

1  Heifer,  900  pounds,  X. 

2  Steers,  2200  pounds,  X. 

3  Veals,  480  pounds,  X. 

5  Sheep,  620  pounds.  Red  Head. 

Forty  pounds  off  on  piggy  sows,  80  pounds  off  on  stags,  Ic  off  on 
cripples. 

FARMERS'  SHIPPING  ASSOCIATION, 

Manager. 

The  above  is  a  form  of  receipt  made  in  duplicate  by  the  manager 
to  each  patron,  when  stock  is  delivered,  showing  the  number,  kind  and 
weight  of  animal-  received,  and  mark  used.  One  copy  is  retained  by 
the  manager  and  the  other  given  to  the  patron. 


STATEMENT 


Farmers  Shipping  Association 


Freight 

Mgr's    Com... 

Incidental   Ex. 

Car  No Yardage 

R.  R. Manager    Selling    Com.. 

Date Mississippi   Gain  or  loss. . . 


N«. 


Weight 


Shrink'o!    Net  Wt 


Price 


Expense  Frt.    To  Bal. 
Com.Yrdo  &      Acct. 


Form  of  statement  used  and  retained  by  the  manager  as  a  perma- 
nent record  of  each  car  shipped. 


LIVE  STOCK   RECEIVED. 


Date.  . 
XVIII I 


Mark 


Name 


No.  of 
Head 


Weight!  Kind. 


I       1 

D  .B.  Aycock 

1        8 

1    9400 

1  Cattle 

"     1 

T.  M.  Patterson 

1        1 

1    1100 

1  Cattle 

III    1 

J.  E.  Bonner 

1       2 

1   zooo 

1  Cattle 

IV       1 

H.  0.  Pate 

1       3 

2735 

1  Cattle 

V       1 

H.  Bending 

1       2 

1    2250 

1  Cattle 

VI       I 


W.  Gernon 


I       1     1    1400    I  Cattle 


25 


VII 
VIIl 
IX 
X 

XI 

XII 

XIII 

XIV 

XV 

XVI 

XVII 

XVIII 

XIX 

XX 

Cards  used  by  the  manager  to  record  the  numbers,  weight  and 
mark  of  stock  as  received  from  each  patron  in  order  to  avoid  dupli- 
cating numbers. 


Statement  to  each   patron 

Miss 19 


M. 


In  account  with 
FARMERS  SHIPPING  ASSOCIATION 
Manager 


Animals 

Hogs 

No. 

Home 
Weight       Share 

Net 

Price 

$ 

Cts. 

Cows 1 

Steers      

Veals 

Sheep 

Total  received 

for  youi 

•  stock . . 

$ 

EXPENSES. 


I  Frt., other  expensd  ;  Chicago  | 

&  Mgr's.  Com.  Yardage       com.         Total  Expenses 


Total  Expense  on  your  stock $ 

Balance  due  you $ 

NOTE: — The  above  is  a  form  of  a  statement  used  by  the  manager, 
accompanied  by  a  check,  in  making  returns  to  the  patrons  after  the 
returns  for  each  shipment  are  received.  The  items,  "Freight",  "Selling 
Commission"  and  "Incidental  Expenses"  may  be  combined  in  one  item 
if  desired. 


26 


General  Porm  of  By-LaM^s 

FOR    A    COOPERATIVE    MARKETING    ASSOCIATION 

SECTION   1— Name. 

This  association  shall  be  known  as  the    ( County 

Association)*  incorporated  under  the  laws  of  the  State  of 

Its  place  of  business  shall  be  in  the  the  (City  of ), 

NOTE — The  name  should  indicate  the  territory  covered  and  the 
c'ass  of  products  handled.  Thus,  "The  Maine  Potato  Shippers' 
Exchange",  "The  Richmond  Egg  Circle",  etc.  Practically  all 
associations  should  be  incorporated  under  the  laws  of  the  state 
where  it  is  located. 

SECTION  2— Objects. 
The  objects  of  this  association  shall  be  to  encourage  better  and 
more  economical  methods  of  production  and  distribution;  to  secure 
better  results  in  grading,  packing,  marketing,  standardizing  and  adver- 
tising our  products;  to  buy  supplies  in  a  cooperative  way;  to  rent, 
buy,  build,  own,  sell  and  control  such  buildings  and  other  real  and 
personal  property  as  may  be  needed  in  the  business;  to  cultivate  the 
cooperative  spirit  in  the  community  and  to  perform  any  other  work 
which  may  tend  to  the  betterment  of  the  members  and  the  uplift  of 
the  neighborhood. 

NOTE — Make  the  objects  as  definite  as  possible,  but  it  is  also  well 
to  include  a  "blanket",  which  will  cover  any  future  efforts  of  the 
association. 

SECTION  3— Membership. 
All  e-igible  and  accepted  members  shall  sign  these  rules,  and  con- 
tribute   their    share    of    capital    stock    or    other    regular    investment 
prescribed. 


*A11  matter  appearing  in  parentheses  is  simply  suggestive,  and 
is  to  be  altered  to  suit  the  best  interests  of  each  individual  association. 
NOTE — There  may  be  conditions  where  it  would  be  wise  to  limit 
membership  to  those  who  have  been  recommended  by  the  Di- 
rectors or  who  have  received  a  two-thirds  vote  of  the  members 
present  at  any  meeting.  It  is  doubtful  if  "chronic  kickers"  should 
ever  be  admitted.  The  admission  of  members  from  other  voca- 
tions is  a 'most  invariably  bad  policy,  not  because  they  are  not 
good  men  but  their  membership  is  incongrous  in  these  associations. 
SECTION  4— Meetings. 

1.  The  annual  meeting  of  the  association  shall  be  held  on  the 

in   each   year.     Notice   of  such   meeting 

shall  be  given  each  member  in  writing  by  the  Secretary,  and  by 
publication  in  the  local  paper  if  convenient  less  than  (one  week) 
previous  to  the  date  of  meeting. 

NOTE — The  annual  meeting  should  be  held  as  soon  after  the  close 
of  the  year's  main  business,  as  will  allow  for  the  settlement  of 
all  accounts,  auditing  the  books  and  the  preparation  of  the  annual 
reports  of  the  officers. 

2.  Special  meetings  may  be  called  at  any  time  by  the  President. 

He  shall  call  such  meetings  whenever   members  shall  in 

writing  so  request.  A  notice  of  such  special  meeting  shall  be  sent  to 
each  member  at  least  5  (five)  days  before  the  date  of  said  meeting, 
which  notice  shall  give  the  nature  of  the  business  to  be  transacted. 
A  similar  notice  shall  be  given  for  all  adjourned  meetings. 


27 

SECTION  5— Quorum. 
(One-fifth)  the  members  in  good  standing  shall  constitute  a  quorum 
for  the  transaction  of  business  at  any  meeting. 
SECTION  6— Officers. 

1.  At  each  meeting  a  Board  of  Directors  shall  be 

elected.  A  President,  Vice-President,  and  Secretary-Treasurer  shall 
be  chosen  by  the  Directors  from  among  themselves  at  the  first  Board 
meeting  after  the  annual  meeting.  They  shall  also  choose  two  auditors 
from  the  members  if  available.  All  officers  shall  be  elected  by  ballot 
and  shall  perform  the  usual  work  of  such  officers.  (Four)  Directors 
shall  constitute  a  quorum  at  any  Board  meeting. 

2.  The  Board  shall  employ  a  Business  Manager,  who  shall  have 
charge  of  the  business  of  the  Association,  under  the  direction  of  the 
Board,   who  shall  fix  his  compensation. 

NOTE — In  a  large  organization  it  would  be  well  to  unite  the  Office 
Manager,  Secretary  and  Treasurer  in  one  person,  as  frequent  audits 
and  counter  signature  of  checks,  vouchers,  etc,  would  serve  as  a 
sufficient  check.  The  combining  of  these  in  one  individual  centers 
all  the  office  work  and  tends  to  greater  efficiency. 

3.  All  officers,  who  may  handle  any  of  the  funds  or  other  property 
of  the  Association,  shall  give  a  surety  bond  in  excess  of  the  funds 
which  they  are  liable  to  hand'e  at  any  one  time.  The  cost  of  such 
bonds  shall  be  paid  for  by  the  Association. 

SECTION  7— Capital  Stock. 

1.  The  capital  stock  of  this  association  shall  be   

divided  into shares  of    each.     No  member  shall 

hold  more  than  (ten)  per  cent,  of  the  outstanding  stock  of  the  asso- 
ciation. 

2.  Transfers  of  shares  shall  only  be  made  upon  the  books  of  the 
association  when  the  stockholder  is  clear  from  all  indebtedness  to  the 
association. 

3.  A  stockholder,  desiring  to  dispose  of  his  shares,  must  first 
offer  them  to  the  association,  through  the  Board  of  Directors,  at 
market  value. 

NOTE — This  provision,  if  desired,  must  be  provided  for  in  the 
articles  of  incorporation,  to  make  it  legal.  To  allow  outsiders  to 
purchase  association  stock  might  transfer  the  control  of  the  or- 
ganization to  those  who  are  opposed  to  its  continuance, 
NOTE  ON  CAPITAL  STOCK— In  case  the  business  of  an  associa- 
tion is  such  as  to  only  require  a  small  amount  of  money  and  that 
only  for  a  short  time  during  each  year,  it  may  not  be  necessary 
to  have  any  capital  stock.  Annual  dues  may  be  collected.  The 
following  plan  has  in  such  cases  worked  well,  where  the  local 
banks  are  prepared  and  willing  to  make  such  loans.  Where  this 
plan  is  adopted  the  following  will  take  the  place  of  the  precedinc 
section: 

SECTION  7— Financing. 

1.  At  the  time  of  uniting  with  the  association  ana  at  the  end 
of  each  three  years  after  the  incorporation  of  the  association,  each 
member  shall  give  a  promissory  note,  payable  on  demandcto  the  asso- 
ciation. This  note  shall  be  for  the  sum  of  ($25.00)  and  mi  additional 
($1.00)  for  each  and  every  acre  of  crops,  to  be  marketed  through  the 
association,  then  owned  by  the  member.  But  in  no  case  shall  this  note 
be  for  a  less  sum  than  ($35.00).  When  a  new  note  is  given,  the  o'd  one 
shall  be  cancelled  and  returned  to  the  maker. 

2.  These  notes  shall  be  the  property  of  the  association  and  s"" 
be  used  by  the  Directors  as  collateral  security  with  which  to  borrow 


28 

needed  money  for  the  association's  business.  Whenever  these  notes 
are  depositd  as  security  for  a  loan,  all  of  the  members  shall  indi- 
vidualy  share  the  liability  in  proportion  to  the  face  value  of  their 
respective  notes, 

3.  Each  member  shall  pay  an  annual  membership  fee  of  $2.00, 
payable  January  1. 

4.  The  capital  and  credit  thus  obtained  shall  be  used  as  direct: 
by  the  stockholders  in  regular  or  called  session, 

SECTION    8 — Grading  and   Inspecting. 

1.  All  goods  produced  for  sale  by  the  members  shall  be  delivered 
to  the  association  as  directed  by  the  Manager,  in  prime  condition  for 
grading,  packing,  and  shipping.  All  grading  and  packing  done  on  the 
grower's  premises  must  be  in  accordance  with  the  rules  of  the  asso- 
ciation and  subject  to  such  inspection  as  may  be  established  by  the 
Directors. 

2.  All  produce  for  shipment  shall  be  inspected  before  shipment, 
and  if  any  produce  is  not  of  good  quality  and  in  good  condition  for 
shipping,  such  produce  shall  be  sorted  or  otherwise  prepared  for 
shipment,  at  the  expense  of  the  party  to  whom  such  produce  belongs. 

3.  All  brands,  labels,  trade  marks,  etc.,  shall  be  registered  and 
become  the  property  of  the  association  and  they  shall  be  only  attached 
to  such  grades  as  shall  be  ordered  by  the  Board  of  Directors. 

SECTION    9— Duties   and   Rights   of   Members. 

1.  A  member  shall  have  the  right  to  give  away,  or  retain  for  his 
own  use  such  of  his  farm  products  as  he  may  wish,  but  he  shall  not 
make  sale  of  crops,  promised  to  the  association,  to  any  outside  parties, 
except  any  product  not  accepted  by  the  association. 

2.  In  case  any  member  is  offered  a  price  in  excess  of  the  price 
then  obtainable  by  the  association,  said  member  shall  turn  said  bid 
over  to  the  association  for  filling  from  said  member's  goods. 

NOTE — Some  such  provision  is  necessary,  to  prevent  an  outside 
disgruntled  dealer  from  making  a  false  bid,  to  test  a  member's 
loyalty  and  arouse  dissension,  with  the  idea  of  disrupting  the 
organization.  Allowing  the  organization  to  handle  this  bid  com- 
pels the  mischief-maker  to  "put  up  or  shut  up";  the  grower  gets 
the  boosted  price,  if  the  bidder  does  not  back  down,  and  the  organ- 
ization handles  the  deal  and  so  is  strengthened  rather  than 
injured.  One  or  two  such  experiences  has  usually  discouraged  this 
very  common  form  of  outside  interference. 

3.  Each  member  shall  have  a  number  or  mark,  which  shall  be 
permanently  stamped  on  every  sack,  box,  barrel,  crate,  basket,  or 
other  package  shipped  by  him  through  the  association.  Any  loss  oc- 
casioned by  improper  packing  or  grading  shall  be  charged  to  the 
member  whose  mark  is  found  on  said  package. 

NOTE — Products  packed  on  the  grower's  premises  should  be 
inspected  as  they  are  being  packed,  by  an  association  inspector. 
He  may  be  employed  and  paid  by  the  grower  to  assist  in  packing, 
but  he  must  be  held  accountable  alone  to  the  association  for  his 
inspection  work.  His  own  private  mark  should  be  placed  upon 
each  package  he  packed  or  inspected  and  he  should  be  held 
jointly  responsible  with  the  grower  for  the  pack,  as  it  may  be 
disclosed  in  the  final  market,  ordinary  deterioration,  excepted. 

4.  Each  member  of  the  association  shall  have  one  vote  and  only 
one;  providing  all  claims  and  dues  against  said  member  have  been 
fully  paid.     No  proxies  shall  be  allowed. 

NOTE — In  a  stock  company,  which  is  organized  to  earn  profits  on 
the  money  invested  in  the  business,  a  member  votes  in  proportion 


to  the  number  of  shares  he  holds.  But  the  true  coopferative 
association  is  based  on  the  individual  member,  a  number  of  whom 
unite  to  do  something  in  which  they  have  a  common  interest. 
In  the  former  money  rules;  in  the  latter,  men.  While  there  may 
be  cases  where  the  voting  power  of  the  members  may  be  made 
in  proportion  to  the  acreage  of  their  products,  it  wi'l  generally  be 
found  that  any  attempt  to  vary  the  voting  power  of  members  will 
be  unwise.  The  practice  of  allowing  a  member  to  collect  the 
proxies  of  absent  members  and  vote  the  same,  possibly  giving  a 
single  member  the  control  of  power,  is  too  dangerous  a  practice 
to  be  allowed. 

In  some  of  the  largest  non-profit  cooperative  associations, 
like  the  California  citrus  fruit  growers,  it  has  been  felt  that  it 
was  neither  fair  nor  wise  to  demand  that  the  large  producing 
members  should  be  hed  to  the  same  vote  as  a  small  producing 
member,  when  their  responsibility  and  liability  are  so  unequal. 
In  such  a  case  the  voting  power  of  members  can  be  made  propor- 
tional to  the  amount  of  their  products  or  acreage  handled  through 
the  association. 

5.  Any  member  may  withdraw  from  the  association  at  any  time 
between  (the  first  day  of  December  and  the  first  day  of  the  following 
April)   but  all  claims  of  whatsoever  nature  must  first  be  settled. 

NOTE — The  time  of  withdrawal  should  be  fixed  so  as  to  take  effect 
after  the  close  of  a  season's  business  and  before  another  season 
begins.  To  permit  a  member  to  withdraw  during  a  busy  marketing: 
season  wi'l  result  in  confusion  and  may  seriously  handicap  the 
manager  in  filling  his  contracts. 

6.  Any  member,  feeling  that  he  has  a  grievance  or  cause  for 
complaint,  may  appeal  to  the  Board  of  Directors,  or  to  the  members  at 
any  regularly  called  meeting.  No  member  shall  be  temporarily  sus- 
pended or  expelled  from  the  benefits  of  the  association,  without  first 
being  heard  in  his  own  defense,  either  by  the  Board  of  Directors  or  by 
the  members  at  a  regularly  cal'ed  meeting, 

SECTION  10 — Duties  and  Powers  of  the  Manager. 
The  manager  shall  employ  and  discharge  all  labor;  he  shall  secure 
information  as  to  crop  and  market  conditions  and  furnish  same  to  the 
members  on  request.  He  shall  encourage  the  production  of  the  best 
varieties  of  products  demanded  by  the  trade.  He  shall  conduct  pack- 
ing schools,  in  order  that  growers  may  become  trained  in  the  best 
methods  of  grading,  packing,  and  labeling  their  products.  He  shall 
have  charge  of  the  grading,  packing  and  inspection  of  all  association 
products  and  shall  have  control  of  the  brands  and  labels  and  their  use 
on  the  association  packages,  in  accordance  with  the  rules  of  the  asso- 
ciation. He  shall  enter  into  contracts  for  the  sale  of  the  association 
goods.  He  shall  have  entire  charge  of  the  marketing  of  all  association 
goods,  subject  on  y  to  the  action  of  the  Board  of  Directors  and  the 
by-laws  and  rules  of  the  association. 

NOTE — The  manager  is  the  most  important  officer  and  his  powers 
must  be  limited  as  little  as  possible.  He  cannot  be  held  respon- 
sible, if  he  is  to  be  dictated  to  at  will  by  each  member  or  the 
officers  are  to  constantly  meddle  with  his  work.  This  does  not 
imply  that  the  manager  should  be  a  dictator.  He  takes  the  sug- 
gestions of  the  officers  and  members  and,  from  those  of  his  own 
experience,  he  constructs  a  business  plan.  Whenever  a  manager 
loses  the  confidence  of  the  members,  he  had  best  be  replaced  with 
a  manager  who  possesses  that  confidence. 

SECTION   11 — Expenses   and   Payments. 


1.  The  expenses  of  operating  this  association  shall  be  met  by  a 
percentage  on  returns  for  produce  sold  by  the  association  or  by  a 
fixed  price  per  package,  the  amount  of  such  charge  to  be  fixed  by  the 
Directors. 

2.  All  merchandise  purchased,  by  the  association  for  the  use  of 
its  members  shall  be  paid  for  in  cash  by  each  member  on  delivery. 

NOTE — Any  system  of  extending  credit  requires  large  capital  and 
often  results  in  considerable  loss. 

3.  Payment  for  produce  will  be  made  to  the  shippers  on  the 
receipt  by  the  association  of  returns  for  the  sale  of  their  produce, 
unless  otherwise  ordered  by  the  full  Board  of  Directors.  In  making 
sales  all  produce  of  the  same  grade  shall  be  pooled  and  all  shippers 
of  the  same  grade  shall  receive  exactly  the  same  price. 

SECTION  12 — Dividends  and  Damages. 
After  the  season's  expenses  are  paid  and  the  proper  sum  set  aside 
as    a   reserve    for   the   depreciation   of   the    association    property,    the 
balance  of  the  season's  profits  shall  be  divided  as  follows: 

1.  The  stockholders  shall  receive  (six)  per  cent  per  annum  on  the 
par  value  of  their  stock. 

2.  One-half  the  balance  shall  be  set  aside  as  a  surplus  fund,  to 
increase  the  working  capita!  or  to  finance  future  improvements  until 
the  surplus  shall  amount  to  a  sum  equal  to  the  capital  stock;  by 
majority  vote  of  the  members  it  may  be  made  greater. 

3.  The  balance  shall  be  divided  among  the  members,  in  proportion 
to  the  value  of  their  shipments  and  purchases  made  through  the 
association  during  that  season. 

Provided,  that  when  any  member  has  failed  during  that  season  to 
live  up  to  his  agreements,  by  failing  to  ship  exclusively  through  the 
association,  or  by  any  other  breach  of  his  contract,  and  provided 
further  that  said  failure  on  his  part  has  resulted  in  a  loss  or  damage 
to  the  association,  then  said  defaulting  member  shall  forfeit  to  the 
association  such  a  share  of  his  dividends  then  due  as  shall  reimburse 
said  association  for  the  loss  or  damages  thus  sustained,  in  lieu  of 
liquidated  damages.  Or  the  association  may  proceed  to  collect  from 
said  defaulting  member  said  damages  out  of  any  other  of  his  funds  or 
property. 

NOTE — Some  courts  have  held  that  to  require  a  member  to  pay 
his  association  a  fee  for  the  privilege  of  selling  contracted 
products  to  an  outside  dealer  is  in  restraint  of  trade;  therefore, 
illegal.  While  it  may  not  be  legal  for  an  association  to  penalize 
its  members,  it  may  be  found  that  an  association  can  legally  pro- 
vide, as  in  this  last  by-law,  to  collect  damages  from  a  defaulting 
member,  when  losses  or  damages  have  actually  resulted  from  the 
failure  of  the  member  to  live  up  to  his  agreements.  Some  form 
of  binding  contract  is  essential  to  hold  the  members  of  an  asso- 
ciation together.  Many  an  organization  has  failed  because  mem- 
bers were  only  bound  by  a  gentlemen's  agreement.  A  voluntary 
membership  is  totally  inadequate  for  a  stable  and  long  enduring 
organization.  The  laws  of  the  state  should  be  studied,  so  that  this 
by-law  for  holding  the  members  may  be  legally  drawn. 

SECTION  13— Auditing. 
The  books  and  business  of  the  association  shall  be  audited 
monthly  by  the  auditors  selected  from  the  membership.  An  annual 
audit  shall  be  made  by  a  certified  public  accountant  previous  to  the 
date  of  the  annual  meeting,  at  which  meeting  said  report  shall  be 
presented  in  full.  Special  audits  shall  be  made  upon  order  of  the 
Board  or  upon  a  vote  of  the  members  at  any  legally  called  meeting. 


31 

NOTE — While  small  associations  may  not  feel  the  need  of  such 
a  strict  system  of  investigating  the  accounts,  it  will  pay  to  have 
this  work  done  often  and  most  thoroughly.  If  the  association 
business  is  being  done  carelessly,  frequent  audits  will  make  it 
known  and  better  methods  may  be  adopted  before  any  great  loss 
occurs.  The  cost  of  an  expert  accountant  is  more  than  balanced 
by  the  confidence  which  it  gives  the  members  and  effectually 
stopping  the  criticism  of  fault  finders. 

SECTION    14— Amendments. 
These  laws  may  be  amended  at  any  meeting  by  a  two-thirds  vote 
of  the  members  present  in  the  afiirmative.     Notice  of  such  proposed 
change  must  be  included  in  the  call  for  said  meeting. 


32 


Form  of  Application  for 

No.  349. 

The  charter  of  incorporation  of 

1.     The  corporate  title  of  said  company  is 


2.  The  names  of  the  incorporators  are: 

Postoffice    

Postoffice    

Postoffice    

Postoffice    

Postoffice    

3.  The  domicile  is  at 

4.  Amount   of   capital    stock 

5.  The  par  value   of   shares   is 

6.  The  period  of  existence  (not  to  exceed  fifty  years)  is 
years. 

7.  The  purpose  for  which  it  is  created  is: 


8.  The  rights  and  powers  that  may  be  exercised  by  this  corpo- 
ration are  those  conferred  by  the  provisions  of  Chapter  24,  Mississippi 
Code,  1906. 


Incorporators. 


ACKNOWLEDGMENT. 
STATE  OF  MISSISSIPPI, 


County. 

This  day  personally  appeared  before  me,  the  undersigned  authority 


,  incorporators  of  the  corporation  known  as  the 


who  acknowledged  that  they  signed  and  executed  the  above  and  fore- 
going  articles   of  incorporation   as   their   act   and   deed,   on   this   the 

day  of  ,  19 

Witness  my  hand  and  official  seal,  this day  of ,  19. . . . 


(Official  title.) 
LEGAL    REQUIREMENTS 
GOVERNING    CORPORATE    BODIES. 
(Extract  from  State  Code,  1906.) 

Witness  my  hand  and  official,  this  day  of  19. . . . 

898.  (833)  How  corporations  created.  The  persons  desirin"; 
to  be  incorporated  shall  apply  to  the  secretary  of  state  for  the 
necessary  blank  form  of  application  for  a  charter,  which  form  shall 
be  as  follows:  , 

"The  charter  of  Incorporation  of  


33 


1.  The  corporate  title  of  said  company  is 

2.  The  names  of  the  incorporators  are: 
Postoffice    


3.  The  domicile  is  at 

4.  Amount  of  capital  stock    

5.  The  par  value  of  shares  is  

6.  The  period  of  existence  (not  to  exceed  fifty  years)  is. 
years. 

7.  The  purpose  for  which  it  is  created  is   


8.  The  rights  and  powers  that  may  be  exercised  by  this  corpo- 
ration are  those  conferred  by  the  provisions  of  this  chapter. 

P.     *  The    which  it  is  proposed  to  build   and 

operate  is  described  as  (here  describe  the  line  and  state  the  points  it 
will    traverse)     . : 

Said  application  blank  when  filled  out  and  signed  by  each  of  the 
incorporators  and  acknowledged  before  a  notary  pub  ic  or  other  officer 
authorized  by  law  to  take  the  acknowledgment  to  deeds,  shall  bo 
published  three  consecutive  weeks  in  one  or  more  newspapers  pub- 
lished at  the  domicile  of  the  proposed  corporation,  and  if  there  be  not  a 
newspaper  puglished  in  the  county  where  such  proposed  corporation  is 
to  be  domiciled,  then  by  publication  in  one  or  more  newspapers  pub- 
lished in  this  state  and  having  circulation  in  the  county  of  the  domicile 
of  the  proposed  corporation;  but  corporations  for  Masonic  and  Odd  Fel- 
lews  lodges,  temperance  societies,  fire  companies,  charitable  associa- 
tions, schools  and  literary  institutions,  religious  societies,  mechanics, 
associations,  fair  associations,  and  agricultural  societies  shall  not  be  re- 
quired to  make  such  publication.  And  said  application,  with  proof  of 
publication  thereof,  if  required,  shall  be  forwarded  to  the  secretary  oi 
state,  with  the  fee  for  recording  and  certifying  the  same  as  provided 
in  section  938  of  this  chapter.  The  secretary  of  state,  on  receipt  or 
said  application,  shall  endorse  upon  it  as  follows:      "Received  at  the 

office  of  the  secretary  of  state  this  the day  of A. 

D ,  together  with  the  sum  of  $ recording  fee,  an 

referred  to  the  attorney  general  for  his  opinion." 


"Secretary  of  State." 
The   attorney-general   shra'l   examine  the   same   and   endorse   his 
opinion  thereon  as  follows:     "I  have  examined  this  charter  of  incor- 
poration and  am  of  the  opinion  that  it the  constitution 

and  laws  of  this  state,  or  of  the  United  States. 


"Attorney-General." 
The  attorney-general  shall  examine  the  same  and  endorse  his 
governor  for  his  approval  or  disapproval.  The  governor  shall  return 
it  to  the  secretary  of  state  with  his  action  endorsed  thereon.  If  h<^ 
approve  it  the  secretary  of  state  shall  record  it  in  the  record  kept  in 
his  office  for  that  purpose,  and  certify  to  the  same  under  the  great  seal 
of  the  state,  and  transmit  it  to  the  applicants;  if  the  governor  disap- 
prove it,  the  secretary  of  state  shall  file  it  in  his  office  and  notify  the 
applicants  of  the  disapproval  and  state  the  reasons  therefor,  and  they 
may  amend  the  same  so  as  to  meet  the  objections  thereto  if  they 
see  fit.     If  they  do  not  amend  it  so  as  to  meet  the  approval  of  the 


34 

governor,  the  secretary  of  state  shall  return  the  fee  to  the  applicants, 
less  the  sum  of  three  dollars,  which  shall  be  paid  into  the  state 
treasury  for  "charters  examined,  disallowed  and  filed."  And  the 
powers  specified  in  such  charters  shall,  by  the  approval  of  the  charter, 
be  vested  in  such  corporation,  and  it  shall  go  into  operation  at  the  time 
and  on  the  terms  and  conditions  specified. 

909.  (844)  Stockholder's  liability  and  transfers  of  stock  (Laws 
1894,  ch.  55).  In  all  corporations  each  stockholder  shall  be  individ- 
ually liable  for  the  debts  of  the  corporation  contracted  during  his 
ownership  of  stock,  for  the  amount  of  any  balance  that  may  remain 
unpaid  for  the  stock  subscribed  for  by  him,  and  may  be  sued  by  any 
creditor  of  the  corporation;  and  such  liability  shall  continue  for  one 
year  after  the  sale  or  transfer  of  the  stock.  The  stock  in  all  corpo 
rations  shall  be  transferable  by  the  endorsement  and  delivery  of  the 
stock  certificate  and  the  registry  of  such  transfer  in  the  books  of  the 
corporation. 

924.  (583)  Debts  in  excess  of  capital  stock.  The  amount  of 
debts  which  any  trading  corporation  or  company  may  contract  or  owe 
shall  not  exceed  the  amount  of  its  capital  stock  paid  in;  and,  in  cas? 
the  debts  exceed  that  amount,  the  directors  who  contracted  such 
debts  sha  1  be  individually  liable  for  the  excess  over  the  amount  of 
capital  stock,  and  may  be  sued  therefor  by  any  creditor,  whether  the 
debt  be  due  at  the  time  of  suit  brought  or  not,  if  such  creditor  was 
without  notice  of  knowledge  of  the  excess  at  the  time  his  debt  was 
made. 

930.  Corporations  shall  report  organization.  Every  corporation 
organized  under  this  chapter  shall,  within  thirty  days  after  such 
organization,  make  report  thereof  to  the  secretary  of  state,  who  is 
required  to  furnish  blank  forms  for  that  purpose  as  provided  for  in 
the  next  section.  The  secretary  of  state  shall  enter  each  report  and 
index  the  same  in  a  record  to  be  kept  in  his  ofiice  for  that  purpose. 
Should  such  report  be  not  made  within  the  time  required,  the  charter 
granted  shall  be  null  and  void,  and  all  persons  doing  business  there- 
under shall  be  deemed  and  held  to  be  partners  in  the  business  and 
liable  as  such. 

931.  Blank  forms  to  be  furnished.  The  secretary  of  state  shall 
send  with  each  charter  of  incorporation  granted  under  this  chapter, 
a  blank  form  of  report  of  organization  to  be  filled  and  signed  by  the 
president  and  certified  by  the  secretary  thereof  and  transmitted  to 
the  secretary  of  state  for  record  in  his  office.  The  form  of  said 
report  shall  be  as  follows: 

REPORT  OF  ORGANIZATION. 
No.  350. 

The  which  was  incorporated  on  the day 

of ,  19 ,  was  organized  on  the day  of 

19 ,  at  ,  in  the  County  of ,  by 

the   election   of 


as  Directors,  who  elected  the  following  officers  to  serve  for. 
year,  to  wit : 


The  postoffice  address  of  the  President  is  

The  postoffice  address  of  the  Secretary  is 

I, ,  who  was  elected  President  of  the  . 

....  on  the   .    day  of   19 . 


do  hereby  certify  jibX  the  foregoing  report  of  the  orgv^nizatloii  of  said 

company  is  correct  and  true. 

,    President 

,    Secretary. 

(Attest) : 


PROXY  TO  VOTE  STOCK. 
No.  351. 
STATE  OF  MISSISSIPPI, 

County. 

I,   of   County,  Mississippi,  do 

hereby  constitute  and  appoint  of my 

true  and  lawful  attorney  in  fact,  with  power  of  substitution  for  me 
and  in  my  name,  place  and  stead  vote  my  stock  at  the  next  reguiar 

annual  (or  special)  meeting  of  the  stockholders  of  the  

to  be  held  in on  ,19 and  to 

represent  me  in  the  transaction  of  all  such  business  as  may  properly 
come  before  such  meeting,  hereby  revoking  all  other  power  hereto- 
fore executed  by  me. 

Witness  my  signature,  this 19 


938.     What  fees  to  be  paid  to  the  secretary  of  state.     The  follow- 
ing fees  shall  be  paid  in  advance  to  the  secretary  of  state,  viz.: 
For  recording  charter  of  each  domestic  corporation  for  profit 

when  the  capital  stock  does  not  exceed  $10,000 $  20.00 

Same  when  capital  stock  exceeds  $10,000  and  does  not  exceed 

$30,000 .    40.00 

Same  when  capital  stock  exceeds  $30,000  and  does  not  exceed 

$50,000 60.00 

Same  when  capital  stock  exceeds  $50,000  the  fee  shall  be  one- 
tenth  of  one  per  cent,  provided  that  no  fee  for  recording  any 

charter   shall   be  more   than 250.00 

For  each   amendment  to  charter  for  profit 50" 

For  each  certified  copy  of  a  domestic  corporation 10.00 

For  each  certified  copy  of  a  foreign  charter 10  '^ 

For   filing  articles   of  consolidation 25.00 

For  filing  other  articles  of  agreement  between  corporations...     20.00 

For  filing  each  charter  of  a  foreign  corporation 15.00 

For  certificate  of  official  character  of  an  officer  or  ex  officio. . . .       2.00 


36 


L.a\^s  Governing  Co-operative  Association. 

At  present  there  is  no  law  in  this  state  providing  for  cooperative 
corporations,  nor  for  protecting  them  were  they  organized.  The  laws 
governing  corporations  should  be  amended  so  as  to  give  cooperative 
business  a  chance.  As  suggestive  of  legislation  on  this  subject  i 
append  herewith  extracts  from  the  code  of  Wisconsin  relative  to  this 
subject, 

CHAPTER   368,  LAWS   OF   1911. 
An  Act  to  create  sections  1786e — 1  to  1786e-17,  inclusive  of  the  statutes, 
relating    to    the    incorporation    of    co-operative    associations,    and    the 
fees  to  be  paid  therefor. 

The   people   of  the   State   of   Wisconsin,   represented   in    Senate    and 
Assembly,  do  enact  as  follows: 

Co-operative  associations:  who  may  organize;  purposes.  Section 
1786e-l.  (Ch.  368,  1911).  Any  number  of  persons,  not  less  than  five, 
may  associate  themselves  as  a  co-operative  association,  society,  com- 
pany, or  exchange,  for  the  purpose  of  conducting  any  agricultural, 
dairy,  mercantile,  mining,  manufacturing  or  mechanical  business  on 
the  co-operative  plan.  For  the  purposes  of  this  act,  the  words  "asso- 
ciation", "company",  "corporation",  "exchange",  "society",  or 
"union",  shall  be  construed  to  mean  the  same. 

Articles:  contents.  Section  1786e-2.  (Ch.  368,  1911.)  They  shall 
sign  and  acknow  edge  written  articles  which  shall  contain  the  name 
of  said  association  and  the  names  and  residences  of  the  persons 
forming  the  same.  Such  articles  shall  also  contain  a  statement  of 
the  purposes  of  the  association  and  shall  designate  the  city,  town  or 
village  where  its  principal  place  of  business  shall  be  located.  Said 
articles  shall  also  state  the  amount  of  capital  stock,  the  number  of 
shares  and  the  par  value  of  each. 

Articles:  verification;  filing;  Charter.  Section  1786e-3.  (Ch.  368, 
1911.)  The  original  articles  of  incorporation  organized  under  this 
act  or  a  true  copy  thereof,  verified  as  such  by  the  affidavits  of  two  of 
the  signers  thereof,  shall  be  filed  with  the  secretary  of  state.  A  like 
verified  copy  of  such  articles  and  certificates  of  the  secretary  of 
state,  showing  the  date  when  such  articles  were  filed  with  and 
accepted  by  the  secretary  of  state,,  within  thirty  days  of  such  filing 
and  acceptance,  sha  1  be  filed  with  and  recorded  by  the  register  of 
deeds  of  the  county  in  which  the  principal  place  of  business  of  the 
corporation  is  to  be  located,  and  no  corporation  shall,  until  such 
articles  be  left  for  record,  have  legal  existence.  The  register  of 
deeds  shall  forthwith  transmit  to  the  secretary  of  state  a  certificate 
stating  the  time  when  such  copy  was  recorded.  Upon  receipt  of  such 
certificate  the  secretary  of  state  shall  issue  a  certificate  of  incorpora- 
tion. 

Filing  fee.  Section  1786e-4.  (Ch.  368,  1911.)  For  filing  of  arti- 
cles of  incorporation  or  corporations  organized  under  this  act,  there 
shall  be  paid  the  secretary  of  state  ten  dollars  and  for  filing  of  an 
amendment  to  such  articles,  five  dollars.  For  recording  copy  of  such 
articles  the  register  of  deeds  shall  receive  a  fee  of  twenty-five  cents 
to  be  paid  by  the  person  presenting  such  papers  for  record. 

Directors:  election;  duties;  election  of  officers.  Section  1786e-5. 
(Ch.  368,  1911.)  Every  such  association  shall  be  managed  by  a  board 
of  not  less  than  five  directors.  The  directors  shall  be  elected  by  and 
from  the  stockholders  of  the  association  at  such  time  and  for  such 


37 

term  of  oflice  as  the  by-laws  may  prescribe,  and  shall  hold  office  for 
time  for  which  elected  and  until  their  successors  are  elected  and  shall 
enter  upon  the  discharge  of  their  duties;  but  a  majority  of  the  stock- 
holders shall  have  the  power  at  any  regular  or  special  stockholders' 
meeting,  legally  called,  to  remove  any  director  or  officer  for  cause,  and 
fill  the  vacancy,  and  thereupon  the  director,  or  officer  so  removed 
shall  cease  to  be  a  director  or  officer  of  said  association.  The  officers 
of  every  such  association  shall  be  a  president,  one  or  more  vice- 
presidents,  a  secretary  and  a  treasurer,  who  shall  be  ejected  annually 
by  the  directors,  and  each  of  said  officers  must  be  a  director  of  th^ 
association.  The  office  of  secretary  and  treasurer  may  be  combined, 
and  when  so  combined  the  person  filling  the  office  shall  be  secretary- 
treasurer. 

Amendments:  how  adopted;  recording.  Section  1786e-6.  (Ch 
368,  1911.)  The  association  may  amend  its  articles  of  incorporation 
by  a  majority  vote  of  its  stockholders  at  any  regular  stockholders' 
meeting,  or  at  any  special  stockholders'  meeting  called  for  that  pur- 
pose, on  ten  days'  notice  to  the  stockholders.  Said  power  to  amend 
shall  include  the  power  to  increase  or  diminish  the  amount  of  capital 
stock  and  the  number  of  shares.  Provided,  the  amount  of  the  capital 
stock  shall  not  be  diminished  below  the  amount  of  paid-up  capital  at 
time  amendment  is  adopted.  Within  thirty  days  after  the  adoption  of 
an  amendment  to  its  articles  of  incorporation,  an  association  shall 
cause  a  copy  of  such  amendment  adopted  to  be  recorded  in  the  office 
of  the  secretary  of  state  and  of  the  register  of  deeds  of  the  county 
where  the  principal  place  of  business  is  located. 

Business  authorized  to  be  conducted.  Section  1786e-7.  (Ch.  368. 
1911.)  An  association  created  under  this  act  shall  have  power  to 
conduct  any  agricultural,  dairy,  mercantile,  mining,  manufacturing  or 
mechanical  business,  on  the  co-operative  plan  and  may  buy,  sell  and 
deal  in  the  products  of  any  other  co-operative  company  heretofore 
organized  or  hereafter  organized  under  the  provisions  of  this  act. 

Stock:  issue;  limit;  vote.  Section  1786e-8.  (Ch.  368,  1911) 
No  stockholder  in  any  such  association  shall  own  shares  of  a  greater 
aggregate  par  value  than  one  thousand  dollars,  except  as  hereinafter 
provided,  or  be  entitled  to  more  than  one  vote. 

Subscription  of  stock  in  other  associations.  Section  1786e-9. 
(Ch.  386,  1911.)  At  any  regular  meeting,  or  any  regularly  called 
special  meeting  at  which  at  least  a  majority  of  all  its  stockholders 
shall  be  present,  or  repre.sented,  an  association  organized  under  this 
act  may,  by  a  majority  vote  of  the  stockholders  present  or  represented 
subscribe  for  shares  and  invest  its  reserve  fund,  or  not  to  exceed 
twenty-five  per  cent  of  its  capital,  in  the  capital  stock  of  any  other 
co-operative  association. 

Purchasing  business  of  other  associations:  payment;  stock  issue. 
Section  1786e-10.  (Ch.  368,  1911.)  Whenever  an  association,  created 
under  this  act,  shall  purchase  the  business  of  another  association, 
person  or  persons,  it  may  pay  for  the  same  in  whole  or  in  part  by 
issuing  to  the  selling  ai^sociation  or  person  shares  of  its  capital  stock 
to  an  amount,  which  at  par  value  would  equal  the  fair  market  value 
of  the  business  so  purchased,  and  in  such  case  the  transfer  to  the 
association  of  such  business  at  such  valuation  shall  be  equivalent  to 
payment  in  cash  for  the  shares  of  stock  so  issued. 

Certificates  of  stock,  when  he'd  in  trust;  issue.  Section  1786e-ll. 
(Ch.  368,  1911.)  In  ease  the  cash  value  of  such  purchased  business 
exceeds  one  thousand  dollars,  the  directors  of  the  association  are 
authorized  to  hold  the  shares  in  excess  of  one  thousand  dollars  in 


38 

trust  for  the  vendor  and  dispose  of  the  same  to  such  persons,  and 
within  such  times  as  may  be  mutually  satisfactory  to  the  parties  i^ 
interest,  and  to  pay  the  proceeds  thereof  as  currently  received  to  the 
former  owner  of  said  business.  Certificates  of  stock  shall  not  be 
issued  to  any  subscriber  until  fully  paid,  but  the  by-laws  of  the 
association  may  allow  subscribers  to  vote  as  stockholders;  provided, 
part  of  the  stock  subscribed  for  has  been  paid  in  cash. 

Stockholders  may  vote  by  mail.  Section  1786e-12.  (Ch.  368, 
1911.)  At  any  regularly  called  general  or  special  meeting  of  the 
stockholders  a  written  vote  received  by  mail  from  any  absent  stock- 
holder and  signed  by  him  may  be  read  in  such  meeting  and  shall  be 
equivalent  to  a  vote  of  each  of  the  stockholders  so  signing;  provided, 
he  has  been  previously  notified  in  writing  of  the  exact  motion  or  reso- 
lution upon  which  such  vote  is  taken  and  a  copy  of  same  is  forwarded 
with  and  attached  to  the  vote  so  mailed  by  him. 

Earnings:  apportionment.  Section  1786e-13.  (Ch .  368,  1911.) 
The  directors,  subject  to  revisions  by  the  association  at  any  general 
or  special  meeting,  shall  apportion  the  earnings  by  first  paying  divi- 
dends on  the  paid-up  capital  stock  not  exceeding  six  per  cent  per 
annum,  then  setting  aside  not  less  than  ten  per  cent  of  the  net  profits 
for  a  reserve  fund  until  an  amount  has  accumulated  in  said  reserve 
fund  equal  to  thirty  per  cent  of  the  paid-up  capital  stock,  and  five  per 
cent  thereof  for  an  educational  fund  to  be  used  in  teaching  co-opera- 
tion, and  the  remainder  of  said  net  profits  by  uniform  dividend  upon 
the  amount  of  purchases  of  shareholders  and  upon  the  wages  and 
salaries  of  employes,  and  one-half  of  such  uniform  dividend  to  non- 
shareholders  on  the  amount  of  their  purchases,  which  may  be  credited 
to  the  account  of  such  nonshareholders  on  account  of  capital  stock  ol 
the  association;  but  in  productive  associations  such  as  creameries, 
canneries,  elevators,  factories,  and  the  like,  dividends  shall  be  on  raw 
material  delivered  instead  of  on  goods  purchased.  In  case  the  asso- 
ciation is  both  a  selling  and  a  productive  concern,  the  dividends  may 
be  on  both  raw  material  delivered  and  on  goods  purchased  by  patrons. 

Distribution  of  dividends.  Section  1786e-14.  (Ch.  368,  1911  ) 
The  profits  or  net  earnings  of  such  association  shall  be  distributed  to 
those  entitled  thereto,  at  such  times  as  the  by-laws  shall  prescribe, 
which  shall  be  as  often  as  once  in  twelve  months.  If  such  association, 
for  five  consecutive  years  shall  fail  to  declare  a  dividend  upon  the 
shares  of  its  paid-up  capital,  five  or  more  stockholders,  by  petition, 
setting  forth  such  fact,  may  app'y  to  the  circuit  court  of  the  county, 
wherein  is  situated  its  principal  place  of  business  in  this  state,  for  its 
dissolution.  If,  upon  hearing,  the  allegations  of  the  petition  are  found 
to  be  true,  the  court  may  adjudge  a  dissolution  of  the  association. 

Annual  report:  contents;  filing.  Section  1786e-15.  (Ch.  368. 
1911.)  Every  association  organized  under  the  terms  of  this  act  shall 
annually,  on  or  before  the  first  day  of  March  of  each  year,  make  a 
report  to  the  secretary  of  state;  such  report  shall  contain  the  name 
of  the  company,  its  principal  place  of  business  in  this  state,  and 
generally  a  statement  as  to  its  business,  showing  total  amount  of 
business  transacted,  amount  of  capital  stock  subscribed  for  and  paid 
in,  number  of  stockholders,  total  expenses  of  operation,  amount  of 
indebtedness  or  liabilities,  and  its  profits  and  losses. 

Co-operative  associations  heretofore  organized:  may  adopt  pro- 
visions of  this  act.  Section  1786e-16.  (Ch.  368,  1911.)  All  co-opera- 
tive corporations,  companies,  or  associations  heretofore  organized  and 
doing  business  under  prior  statutes,  or  which  have  attempted  to  so 
organize  and  do  business,  shall  have  the  benefit  of  all  of  the  provisions 


39 

of  this  act,  and  be  bound  thereby  on  filing  with  the  secretary  of  state 
a  written  declaration  signed  and  sworn  to  by  the  president  and  secre- 
tary to  the  effect  that  said  co-operative  company  or  association  has 
by  a  majority  vote  of  its  stockholders  decided  to  accept  the  benefit'? 
of  and  to  be  bound  by  the  provisions  of  this  act.  No  association 
organized  under  this  act  shaP  be  required  to  do  or  perform  anything 
not  specifical'y  required  herein,  in  order  to  become  a  corporation  or 
to  continue  its  business  as  such. 

Use  of  term  "co-operative"  limited  to  corporations  under  this  act. 
Section  1786e-17.  (Ch.  368,  1911.)  No  corporation  or  association 
hereafter  organized  or  doing  business  for  profit  in  this  state  shall  be 
entitled  to  use  the  term  "co-operative"  as  part  of  its  corporate  or 
other  business  name  or  title,  unless  it  has  complied  with  the  provisions 
of  this  act;  and  any  corporation  or  association  violating  the  provisions 
of  this  section  may  be  enjoined  from  doing  business  under  such  name 
at  the  instance  of  any  stockholder  or  any  association  legally  organiz-^ 
hereunder. 

Section  2.  This  act  shall  take  effect  and  be  in  force  from  and 
after  its  passage  and  publication. 

THE    NEBRASKA    LAW.       . 

In  Nebraska,  a  law,  Senate  File  No.  88..  defines  cooperative  asso- 
ciations and  gives  cooperation  a  definite  legal  status.  The  law  says, 
"for  the  purpose  of  this  act,  the  words  'cooperative  company,  cor- 
poration, or  association'  are  defined  to  mean  a  company,  corporation, 
or  association  which  authorizes  the  distribution  of  its  earnings  in 
part  or  wholly,  on  the  basis  of,  or  in  proportion  to,  the  amount  of 
property  bought  from  or  sold  to  members,  or  of  labor  performed,  or 
other  service  rendered  to  the  corporation."  It  differs  from  the  general 
incorporation  law  of  Nebraska  by  providing  that  every  cooperative 
corporation  has  the  power  "to  regulate  and  limit  the  right  of  stock- 
holders to  transfer  their  stock;  and  to  make  by-laws  for  the  manage- 
ment of  its  affairs,  and  to  provide  thereon  the  term  and  limitation  ot 
stock  ownership,  and  for  the  distribution  of  its  earnings." 

Very  few  states  have  laws  providing  for  the  chartering  of  com- 
mercial companies  witho^it  a  capital  stock.  Corporations  doing 
commercial  business  without  share  capital  is  a  new  development  in 
modern  business.  All  states  charter  fraternal,  religious,  charitable  and 
educational  associations  without  capital  stock;  they  are  not  run  as 
commercial  institutions  and  therefore  not  supposed  to  need  capital 
stock;  the  expenses  being  met  by  charter  fees  and  dues.  But  we  now 
have  commercial  associations  operating  on  the  same  basis,  with 
similar  powers  in  restricting  membership  and  the  expulsion  of  mem- 
bers and  preventing  transfer  of  membership,  that  are  given  fraternal, 
religious,  charitable  and  educational  organizations. 

As  an  example  we  give  herewith  extracts  from  the  California  law 
providing  for  this  type  of  corporation. 

THE    CALIFORNIA    LAW. 

In  California,  a  law  has  been  enacted  relating  to  the  incorporation, 
organization,  management,  and  cooperation  of  agricultural,  viticultural, 
and  horticultural  nonprofit  association.^.     The  law  provides  that:  — 

"Such  associations  shall  not  have  a  capital  Ltock,  and  its  business 
shall  not  be  carried  on  for  profit.  Any  person  or  any  number  of 
persons,  in  addition  to  the  original  incorporators,  may  become  mem- 
bers of  such  association,  upon  such  terms  and  conditions  as  to 
membership,  and  subject  to  such  rules  and  regulations  as  to  their, 
and  each  of  their,  contract  and  other  rights  and  liabilities  between  iM 
and  the  member,  as  the  said  association  shall  provide  in  its  by-laws  |y 


40 

The  association  shall  issue  a  certificate  of  membership  to  each  mem- 
ber, but  the  said  membership,  or  the  said  certificate  thereof,  shall  not 
be  assigned  by  a  member  to  any  other  person,  nor  shall  the  assigns 
thereof  be  entitled  to  membership  in  the  association,  or  to  any  property 
rights  or  interests  therein.  Nor  shall  a  purchaser  at  execution  sale, 
or  any  other  person  who  may  succeed  by  operation  of  law  or  otherwise 
to  the  property  interests  of  a  member,  be  entitled  to  membership,  or 
become  a  member  of  the  association  by  virtue  of  such  transfer.  The 
board  of  directors  may,  however,  by  motion  duly  adopted  by  it, 
consent  to  such  assignment  or  transfer  and  to  the  acceptance  of  the 
assignee  or  transferee  as  a  member  of  the  association,  but  the  asso- 
ciation shall  have  the  right,  by  its  by-laws,  to  provide  for  or  against 
the  assignment  of  membership  certificates,  and  also  the  terms  and 
conditions  upon  which  any  such  transfer  or  assignment  shall  be 
allowed." 

The  California  law  states  that  "whether  the  voting  power  and 
property  rights  and  interests  of  each  member  shall  be  equal  or  unequal, 
and  if  unequal  the  articles  shall  set  forth  a  general  rule  or  rules 
applicable  to  all  members  by  which  the  voting  power  and  the  property 
rights  and  interests,  respectively,  of  each  member  may  and  shaU  be 
determined  and  fixed,  but  the  association  shall  have  power  to  admit 
new  members  who  shall  be  entitled  to  vote  and  to  share  in  the 
property  of  the  association  with  the  old  members,  in  accordance  with 
such  general  rule.  This  provision  of  the  articles  of  incorporation  shall 
not  be  altered,  amended,  or  repealed  except  by  unanimous  written 
consent  or  vote  of  all  the  members." 

Under  the  California  law  each  association  may  by  its  by-laws 
approve:  — 

"The  amount  of  membership  fee,  if  any,  and  the  amount  which 
each  member  shall  be  required  to  pay  annua' ly,  or  from  time  to  time, 
if  at  all,  to  carry  on  the  business  of  the  association. 

"The  number  and  qualifications  of  members  of  the  association 
and  the  conditions  precedent  to  membership  and  the  method,  time,  and 
manner  of  permitting  members  to  withdraw,  and  providing  for  the 
assignment  and  transfer  of  the  interest  of  members,  and  the  manner 
of  determining  the  value  of  such  interest  and  providing  for  the  pur- 
chase of  such  interest  by  the  association  upon  the  death,  withdrawal, 
or  expulsion  of  a  member  or  upon  the  forfeiture  of  his  membership, 
at  the  option  of  the  association." 

"Permitting  members  to  vote  by  their  proxies,  and  determining 
the  conditions,  manner,  form  and  effect  thereof." 

Each  association  shall  also  have  the  power — 

"To  appoint  such  agents  and  officers  as  its  business  may  require, 
and  such  appointed  agents  may  be  either  persons  or  corporations;  or 
admit  persons  to  membership  in  the  association,  and  to  expel  any 
member  pursuant  to  the  provisions  of  its  by-laws;  to  forfeit  the 
membership  of  any  member  for  violation  of  any  agreement  between 
him  and  the  association,  or  for  his  vio'ation  of  its  by-laws. 

"To  purchase  or  otherwise  acquire,  hold,  own,  sell,  and  otherwise 
dispose  of  any  and  every  kind  or  kinds  of  real  and  personal  property 
necessary  to  carry  on  its  business,  and  to  acquire  by  purchase  or 
otherwise  the  interest  of  any  member  in  the  property  of  the  associa- 
tion. 

"Upon  the  written  assent  or  by  vote  of  members  representing 
two-thirds  of  the  total  votes  of  all  members  to  cooperate  with  any 
other  cooperative  corporation  or  corporations  for  the  cooperative  and 
more  economical  carrying  on  of  their  respective  businesses,  by  con- 


41 

solidation  as  provided  in  section  6531  of  this  code,  whereupon  the 
effect  of  such  consolidation  shall  be  the  same  as  declared  in  said 
section;  or  upon  resolution,  adopted  by  its  board  of  directors,  to 
enter  into  all  necessary  and  proper  constipu  ations  and  arrangements 
with  any  other  cooperative  corporation  or  corporations  for  the  co- 
operative and  more  economical  carrying  on  of  its  business,  or  any 
part  or  parts  thereof;  or  any  two  or  more  cooperative  corporations 
organized  under  this  title,  upon  resolutions,  adopted  by  their  respect- 
ive boards  of  directors,  may,  for  the  purpose  of  more  economically 
carrying  on  their  respective  businesses,  by  agreement  between  them, 
unite  in  employing  and  using,  or  several  associations  may  separately 
employ  and  use,  the  same  methods,  means  and  agencies  for  carrying 
on  and  conducting  their  respective  businesses." 

DEPARTMENT    OF    MARKETS 
AT    A.    &    M.    COLLEGE 

Answering  the  demand  for  the  practical  in  the  preparation  of 
the  student  for  the  realities  of  life  on  the  farm,  for  the  equipment  of 
those  who  are  to  be  the  farmers  of  the  future,  with  the  necessary 
knowledge  in  the  conduct  of  the  distribution  of  his  products  to  the 
consumers  of  the  world,  as  well  as  their  production,  the  Agricu  turai 
and  Mechanical  College  of  Mississippi  has  established  a  department  of 
Markets  and  Rural  Economics  as  a  part  of  its  regular  curriculum. 

Economics  has  to  do  with  the  most  effective  use  of  labor  and  its 
agencies.  Rural  economics  treats  of  production,  distribution  and  use 
of  rural  wealth,  and  the  best  investments  on  the  farm  of  time,  money 
and  knowledge. 

In  conducting  a  class  in  this  course  the  superordinate  subjects 
studied  are   Production,  Distribution,  and  Finance. 

PRODUCTION. 

Under  the  head  of  Production  the  c  ass  is  instructed  in  the  sub- 
jects of  tillage;  investments;  general  expenditures;  factors  determin- 
ing the  class  of  farming  to  be  done;  agencies  and  conditions  sur- 
rounding farm  life;  farm  demonstration;  individual  farm  management; 
corporation  farm  management;  co-operative  farm  management; 
bonanza  or  large  estate  farming,  its  advantages  and  disadvantages;  the 
adaptability  of  each  to  specific  conditions. 

Students  are  required  to  itemize  the  expenditures  legitimately 
included  in  the  cost  of  production.  This  brings  out  discussions  on 
the  standards  of  living  and  their  effect  on  the  cost  of  production. 

The  growth  of  tenancy,  its  cause  and  cure  is  studied  from  tha 
historic,  economic  and  social  standpoints. 

The  effects  of  immigration  economically,  socially  and  politically 
and  the  effects  of  the  movement  from  the  country  to  the  towns  and 
cities  are  covered  in  their  various  phases. 

DISTRIBUTION. 

Under  the  division  of  Distribution  the  student  is  directed  to  study 
the  influence  of  commerce  on  the  history  of  the  world;  the  evolution 
in  the  conduct  of  commerce  and  the  marked  "speeding  up"  of  modern 
transportation.  The  various  systems  of  marketing  and  methods  ot 
distribution  are  then  taken  up  and  compared  one  with  another.  The 
selling  methods  of  the  trusts  and  the  farmers  are  contrasted;  the 
methods  of  the  railroads  in  selling  service;  insurance  companies  in 
selling  "protection";  banks  in  selling  credit;  manufacturers  in  sel  ing 
their  products;  wholesalers,  jobbers,  retailers,  mail  order  methods, 
etc.,  etc.,  are  all  handled  till  the  student  is  familiar  with  each.  The 
law  of  price  is  discussed,  and  the  agencies  regulating  price,  and  the 
distinction  between  price  and  cost  are  studied  from  all  angles. 


42 

Conditions  which  render  individual  marketing  inevitable  are  con- 
sidered and  conditions  under  which  collective  marketiiig  is  developed 
given  attention.  Comparisons  are  made  between  individual  marketing, 
corporation  marketing,  and  co-operative  marketing,  and  the  economic 
significance  of  each.  This  subject  is  amplified  by  studying  ine 
examples  of  each  class  in  various  countries  and  with  various  products 
handled  by  each  method. 

The  effects  of  the  standardization  of  products  in  securing  better 
prices;  the  purpose  of  trademarks,  brands;  how  to  ship;  bills  of 
lading;  legal  features  of  the  same;  the  C.  I.  F.  &  6  per  cent  contracts; 
water,  tare,  refrigeration,  etc,  come  in  for  study.  Plans  for  the 
linking  together  of  organized  city  buyers  and  organized  country  pro- 
ducers; municipal  markets  as  operated  in  Europe  and  America  are 
brought  into  play. 

The  class  is  drilled  in  the  writing  of  Constitutions  and  By-Laws 
governing  every  kind  of  corporation.  It  is  made  to  go  thro'igh  with 
the  moot  process  of  securing  a  charter  for  an  organization;  discussions 
are  held  as  to  the  kind  of  corporation  it  is  best  to  be,  and  adjusting 
the  Constitution  and  By-Laws  to  suit  the  kind  of  business  and  its 
method  of  operation. 

The  subject  of  Exchanges  is  then  taken  up.  The  cotton  exchanges, 
the  grain  exchanges  and  the  stock  exchanges  are  studied;  their 
systems  of  organization,  methods  of  business;  scope  of  operation — ali 
the  functions  they  perform.  Thorough  drilling  is  carried  on  to 
familiarize  the  student  with  the  methods  of  the  commercial  world 
and  the  part  the  exchanges  play  in  the  same. 

The  buying  end  of  distribution  is  then  taken  up  and  another  com- 
parison is  made  between  individual  buying,  corporation  buying  and 
co-operative  buying. 

The  subject  of  different  types  of  corporations  is  handled  by 
folowing  the  lines  of  demarkation  between  the  various  kinds  - 
corporations  divided  on  the  basis  of  the  attitude  of  each  toward  its 
stockholders,  its  employees  and  its  customers.  By  this  standard  wf 
have  the  ordinary  corporation,  the  copartnership  corporation  and  the 
co-operative  corporation.  These  are  compared,  using  numerous 
examples,  and  the  effect  of  each  method  on  the  producer,  the  inter- 
mediary and  the  consumer  traced  to  the  ultimate. 

The  subjects  of  watered  stocks,  interlocking  directorates,  inflated 
securities,  bogus  promotion  schemes,  capitalizing  incomes,  frenzied 
finance  are  given  place  in  the  course  to  familiarize  students  with  the 
fundamental  principles  underlying  ail  the  various  agencies  affecting 
the  life,  prosperity  and  general  welfare  of  the  producers  and  the  gen- 
ergil  citizenship  of  the  nation. 

The  International  Institute  of  Agriculture  Is  included.  It  is 
supported  by  53  nations,  representing  98  per  cent  of  the  population  and 
95  per  cent  of  the  area  of  the  earth.  Its  history,  divisions  and  func- 
tions are   studied. 

The  Government  Bureau  of  Markets — its  purpose,  possibilities, 
duties,  prospects  and  methods — gives  wide  range  for  plans  anC  dis- 
cussions. Being  a  new  governmental  venture  its  development  will 
be  watched  with  unusual  interest. 

FINANCE. 

Agricultural  finance;  rural  credits;  farm  banking;  long-time  land 
loans;  short-time  personal  loans;  all  these  are  studied  in  tlie  light  of 
present-day  needs.  The  rural  credit  systems  of  Europe  are  studied  in 
detail.  Long-time  loans  on  land,  for  personal  use  and  for  purpose  of 
purchase;    by   private   initiative,    corporation    administratlou    and    by 


43 

government  aid;  the  amortization  principles  as  applied  to  land  loans; 
short-time,  personal  credit  co-operative  banking;  the  Scnuize-Delitzsch, 
the  Raiffeisen,  the  Credit  Agricole,  the  Credit  Foncier — all  these  are 
studied  and  the  effect  of  co-operative  finance  on  country  life — the 
effect  on  production,  distribution,  consumption  and  the  social  life  ol 
rural  life,  and  the  possible  adaptation  of  some  of  the  principles  of 
co-operative  finance  and  distribution  to  American  agriculture. 

The  cost  of  living  as  it  affects  all  classes  of  society  is  taken  up 
and  studied  in  its  various  phases:  What  it  takes  to  constitute  cost  of 
living;  cost  as  regulated  by  the  power  to  earn;  cost  as  regulated  by 
the  power  to  consume;  cost  as  affected  by  distribution;  cost  as 
affected  by  standards  of  civilization;  individual  responsibility  in 
determining  the  cost  of  living;  collective  or  social  responsibility  in 
determining  the  cost  of  living;  our  waste  of  resources  In  production; 
the  extravagant  use  of  luxuries; — and  the  bearing  of  all  these  on 
production  and  distribution,  which  must  be  paid  by  the  consumer. 

The  subject  of  Parasites  is  then  studied:  Human  parasites 
analogous  to  parasites  in  the  vegetable  and  animal  kingdoms.  The  idle 
parasite  and  the  industrious  parasite;  the  useful  parasite  and  the 
useless  parasite;  classes  that  could  and  should  be  eliminated  and 
classes  that  could  not  and  should  not  be  e'iminated. 

Approximate  price  index  of  various  countries  compared  with 
volume  of  m.oney  per  capita  int^ach;  the  effect  of  tariff  ana  reciprocity 
treaties  and  of  merchant  marine  on  prices,  are  considered. 

Finally  the  various  schools  of  thought  and  the  proposals  of  each 
for  the  industrial  relations  of  all  classes  of  society  and  the  future  of 
the  government  are  presented  from  the  standpoint  of  advocates. 

Thus  the  student  becomes  familiar  with  business,  the  part  tlie 
farmer  plays  in  the  economy  of  the  world,  the  opportunities  and 
duties  of  to-day  and  the  hopes  of  the  future. 

With  a  full  knowledge  of  the  methods  of  the  business  world; 
familiar  with  the  process  of  growth  of  the  trust;  understanding  the 
merits  of  the  economy  of  large  business;  understanding  the  agencies 
of  failure  as  exemplified  by  the  millions  of  the  submerged;  studying 
the  cause  and  effect  of  economic  pressure,  investigating  the  factors 
of  development  and  progress,  of  decadence  and  failure,  the  power  of 
organized  effort,  as  against  the  helplessness  of  unorganized  effort,  the 
problems  pressing  for  solution  by  this  generation  can  certainly  be 
more  readily  understood  by  those  upon  whom  the  solution  depends. 

It  is  one  of  the  penalties  of  free  government  that  we  must  study 
these  things  or  pay  the  forfeit.  Nemesis  stands  with  wraiths  around 
to  haunt  the  abode  of  indolence  and  dead  hopes.  We  deem  it  one  of 
the  duties  of  the  colleges  and  universities  of  America  to  aid  in  the 
work  of  preparing  the  farmer  of  the  future  for  his  duties  In  other 
lines  as  well  as  in  production,  that  he  may  work  out  his  destiny  with 
a  full  appreciation  of  all  the  factors  involved,  the  obstacles  ne  must 
surmount,  and  the  agencies  at  his  command. 

(Note:     I  have  prepared  a  Text  Book  for  this  course.     Published 

by  the  Shakespeare  Press  114-116  E.  28  St.,  New  York  City.     Price 

$1.50  net.) 


44 

PUBLICATIONS    RECOMMENDED    FOR    READING    IN    THE   STUDY 

OF    FARM    CREDIT,    MARKETING,    AND    BUSINESS 

ORGANIZATION. 

APPLES. 

Fletcher,  S.  W.     Three  Problems  in  Virginia  Fruit  Growing.     Virginia 

Agricultural  Experiment  Station,'  1913.     Pages  1-15. 
McNeill,  A,     Modern  Methods  of  Packing  Apples  and  Pears.     Bulletin 

34  Dairy  and  Cold  Storage  Commissioner's  Series,  Department  of 

Agriculture,  Ottawa,  Canada,  1913.     Pages  5-67. 
Paddock,  W.     Fruit  Growers'  Associations.     Bulletin  122,  Agricultural 

Experiment   Station,   Colorado  Agricultural  College,   1?07.     Pages 

3-17. 
Palmer,  W.  R.     Packing  Indiana  Apples.     Circular  No.  39,  Agricultural 

Experiment  Station,  Purdue  University,   Lafayette,  Indiana,   1913. 

Pages  1-28. 
Forty-fourth    Annual    Report    of    the    Fruit    Growers'    Association    of 

Ontario.     Toronto,  Canada,  1912.     Pages  3-116. 
BUYERS    AND    PRODUCERS. 
Camp,    Wm.    R.      Farmers'    Market    Bulletin    No.    1.      List    of    Farm 

Products  for  sa  e.  Division  of  Markets,  West  Raleigh,  N.  C,  1914. 
Emmert,    M.    M.      Partial    List    of    Brokers,    Commission    Ivlerchanis, 

Jobbers  and  Receivers  of  Fruits,  Melons,  Vegetables  ana  Berries 

located  at  Principal  cities  in  the  United  States  and  Dominion  of 

Canada,  East  of  Rocky  Mountains.     Southern  Railway,  Washing- 
ton, D.  C,  1913.     Pages  1-109. 
List  of  Fruit,  Vegetables  and  Melon  Growers  in  the  Territory  Tribu- 
tary to  the  Lines  of  Mobile  &  Ohio  Railroad  and  Southern  Railway 

in  Mississippi,  1913.     Pages  1-56. 

'For  Sale". Bulletin.  A  circular  published  by  the  Southern  Railway. 

Office   of   Markets.      J.    M.    Seaborn,    Market   Agent,    Atlanta,    Ga. 

M,  M.  Emmert,  Market  Agent,  Washington,  D.  C. 
BUTTER,    EGGS   AND    POULTRY. 
Pennington,  M.  E.     Studies  of  Poultry  from  the  Farm  to  the  Consumer. 

Circular  04,  Bureau  of  Chemistry  U  .S.  Department  of  Agriculture, 

1910.     Pages  5-42. 
Slocum,    R.    R.      Marketing    Eggs    Through   the    Creamery.      Farmers' 

Bulletin  445,   U.   S.   Department  of  Agriculture,   1911,   Pages   5-12. 
Taylor,  H.  C.     The  Prices  of  Farm  Products,  including  price  of  eggs, 

etc.      Bulletin    209,    Wisconsin    Agricultural    Experiment    Station, 

Madison,  1911.     Pages  3-30. 
Taylor,  H.  C,  Schoenfield,  W.  A.,  Wehrwein,  G.  S.     The  Marketing  of 

Wisconsin    Cheese.      Wisconsin    Agricu.tural    Experiment    Station, 

Madison,  1913.     Pages  3-4C. 
Melvin,  A.  D.     The   Organization  of  Boys'  and   Girls'  I'oullry   Clubs. 

Bulletin  562,  U.  S.  Department  of   Agriculture,  1913.     Pages  1-12. 

CATTLE. 
Rasmussen,    Frederik.      Cattle    Breeders'    Associations    in    Denmark. 

Bulletin    129,    Bureau    of   Animal    Industry,    U.    S.    Department    of 

Agriculture,  1911.     Pages  7-40. 

COTTON. 
Brand,  C.  J.     Improved  Methods  of  Handling  and  Marketing  Cotton. 

Reprint  from  Yearbook  of  Department  of  Agriculture,  1912.    Pages 

443-462. 
Sherman,  W.  A.,  Fred  Taylor,  C.  J.  Brand.     Studies  of  Primary  Cotton 

Market  Conditions  in  Oklahoma.    Bulletin  36,  U.  S.  Department  of 

Agriculture,  1913.    Pages  1-36. 
Carson,  J.  M.  Packing  and  Marketing  of  Cotton.    Special  Agent  Series 


45 

No.  58,  Bureau  of  Manufactures,  Department  of  Commerce,  1912. 

Pages  5-39. 
Report   of   the   Commissioner   of   Corporations   on   Cotton   Exchanges. 

Parts  I-V,  Washington,  1P09. 

CREDIT. 
Duffus,  Wm.  M.     State  Loans  to  Farmers.     Wisconsin  State  Board  of 

Public  Affairs,  Madison,  1012.    Pages  1-146. 
Herrick,  M.  T.     Land  and  Agricultural  Credit  in  Europe.     Division  of 

Information,  Department  of  State,  Washington,  1912.   Pages  3-38. 
ChapiUy  A.  R.     Bank  Commissioner  of  Massachusetts,  Credit  Unions, 

S^tatement  and  Suggestions  in  regard  to  organizing  and  managing 

a    Credit    Union    in    Massachusetts.      Chapter    419,    acLs    of    1909. 

Pages  5-34. 
Land    Mortgage   Associations.      Chapter   666,    Laws   of    1913,    Madison 

Wisconsin. 
Cooperative  Credit  Associations.     Chapter  733,  Laws  of  1913,  Madison, 

Wisconsin. 
Young,  James  R.     Land  and  Loan  Associations.     Office  of  Insurance 

Commissioner,  Raleigh,  N.  C,  1912.     Pages  2-19. 
Report  of  the  United  States  Commission.     Agricultural  Creait,  Parts 

I  and   II.  63d   Congress,   2d   Session.     Senate  Doc.  No.   318,   1914. 

Pages   9-73. 
Report  of  the  Agricultural  Credit  Commission.     Province  of  Saskatch- 
ewan, Regina,  1913.     Pages  2-31. 
Wolff,  Henry  W.     Cooperative  Banking.     G.  E.  Stechert  Company,  151 

W.  25t.h  street,  New  York  City. 

FRUIT    AND    TRUCK. 
Beattie,    W.    R.      The    Storage    and    Marketing    of    Sweet    Potatoes. 

Farmers'    Bulletin    520,    U.    S.    Department    of    Agriculture,    1912. 

Pages  5-16. 
Corhett,  L.  C.  A  Successful  Method  of  Marketing  Vegetable  Products. 

A  Reprint  from  the  Yearbook  of  the  Department  of  Agriculture 

for  1912.     Pages  353-362. 
Hint.    W.    N.,    S.    B.    Shaw,    O.    M.    Clark.     Truck    Growing   in    North 

Carolina.     Bulletin  of  the  N.  C.  Department  of  Agriculture,  Sep- 
tember, 1912.     Pages  5-40. 
McNeir,  A.     Cooperation  and  Fruit  Growing.     Bulletin  38,  Dairy  and 

Cold   Storage   Commissioner's   Series,   Department  of  Agriculture, 

Ottawa,  Canada,  1912.     Pages  7-46. 
The   Inspection   and   Sale  Act.     Part  IX,   Bulletin  40,   Dairy  and   Co^d 

Storage  Commissioner's  Series,  Department  of  Agriculture,  Fruit 

Division,  Ottawa,  Canada,  1913.     Pages  5-13. 
Reimer,  F.  C.     The  Dewberry  in  North  Caroina.     N.  C.  Department  ol 

Agriculture,  Raleigh,  N.  C.     Pages  3-24. 
Shaw,   S.   B.     The   Preparation  of  Fruit   and  Vegetables   for   Market. 

Bulletin  of  N.  C.  Department  of  Agriculture,  Raleigh,  May,  1909. 

Pages  3-38.     Commercial   Strawberry   Culture.     Bulletin  of  N.   C. 

Department  of  Agriculture,  Raleigh,  August,  1913.     Pages  5-24. 
Chandler,   W.    H.      Cooperation    Among   Fruit   Growers.      Bulletin    44, 

Missouri   State   Board   of  Horticulture,   Columbia,   Missouri,   1910. 

GRAIN. 
Report  of  the  Interstate  Commerce  Commission  in  the  matter  of  the 

grain  trade  in  relation  to  common  Carriers.     1906.     Pages  3-1128. 
RETAIL  PRICES. 
Adams,    N.    C.      Sugar    Prices    from    Refiner    to    Consumer.      Bulletin 

Whole  No.   121,   Retail   Prices   and   Cost  of  Living   Series  No.   7, 

Bureau    of   Labor    Statistics,    U.    S.    Department    of    Labor,    1913. 


46 

Pages  5-42, 

Bulletins  on  Wheat  and  Flour  Prices  from  the  Farmer  to  the  Con 

sumer. 

Butter  Prices  from  the  Farmer  to  the  Consumer. 
Croxton,  Fred  C.  Retail  Prices,  1890  to  August,  1913.     Whole  No.  136, 

Retail  Prices  and  Cost  of  Living  Series  No.  11,  Bureau  of  Labor 

Statistics,  U.   S.  Department  of  Labor,  1913.     Pages  5-146. 

Retail  Prices,  1890  to  1911.     Bulletin  of  the  U.  S.  Bureau  of  Labor, 

Whole  No.  105,  Part  I,  Department  of  Commerce  and  Labor,  1912. 

Pages  5-48. 

STORES. 
Sinc'air,  J.   F.     Distributive  or  Store  Cooperation.     Wisconsin    State 

Board  of  Public  Affairs,   Madison,  1912.     Pages  7-4o. 
Board  of  Trade  Report  on  the  Industrial  and  Agricultural  Cooperative 

Societies  in  the  United  Kingdom.     London,  1912. 
TOBACCO. 
Report  of  the  Commissioner  of  Corporations  on  the  Tobacco  Industry. 

Parts  I  to  n.     Washington,  1909. 

GENERAL  WORKS  AND  PAMPHLETS. 
Coulter,  J.  L.     Cooperation  among  Farmers.     New  York  City,  Sturgis 

and  Walton  Co.,  1911.     Pages  3-28. 
Fay,  C.  R.     Cooperation,  at  Home  and  Abroad.     Macmillan  Co.,  New 

York,  1908.     Pages  403. 
Holmes,   George   K.      Systems    of  Marketing   Farm   Products,    Nu.    98, 

Office   of   the   Secretary,   U.    S.    Department   of   Agriculture,    1913. 

Pages  391.     Price  75  cents. 
Powell,  G.  H.  Cooperation  in  Agriculture,  New  York,  Macmillan  Co., 

1913.     Pages  327. 
The   Agricultural    Outlook.      Farmers'   Bulletin,   U.    S.   Department   ot 

Agriculture. 
Report  of  Committees  Appointed  by  the  Governor  of  North  Carolina 

ing  Organizations  in  Europe. 
Report  of  Committees  Appointed  by  the  Governor  of  North  Carodina 

on    Needs    of   North    Carolina    Farmers    with    Regard    lo    Credits, 

Marketing  and  Cooperation,  1913.  Pages  3-13. 
Sinclair,  J.  F.     Agricultural   Cooperation.     Wisconsin   State  Board  of 

Public  Affairs.     Madison,  1912.     Pages  5-132. 
Williams,  A.  L.     A  Plan  for  a  Cooperative  Neighborhood.     Wisconsin 

State  Board  of  Public  Affairs.     Madison,  1913.    Pages  3-18. 
Farmers'    Clubs.      Their    Organization    and    Work.      North    Carolina 

Agricultural  Experiment  Station  Circular  No.  15. 
RURAL    CREDITS. 

A  great  deal  has  been  said  about  Rural  Credits  during  the  last 
few  years.  This  discussion  has  necessarily  been  concerning  foreign 
institutions  as  we  have  no  rural  credit  institutions  of  note  in  this 
country.  A  few  desultory  efforts  have  been  made  in  Massachusetts 
and  New  York  under  state  provisions  for  such  organizations:  they 
have  taken  the  form  of  short  time  personal  credit  associations  or 
banks.  A  campaign  for  a  national  system  of  rural  credits,  taking  the 
form  of  sending  commissions  to  Europe  in  1913  to  study  the  subject 
at  first  hand,  resulted  in  congress  appointing  a  sub-committee  on 
rural  credits  of  the  permanent  Committee  on  Banking  ana  Currency 
and  authorizing  this  sub-committee  to  have  hearings  on  the  subject 
that  a  bill  might  be  drawn  suited  to  American  conditions.  After  ex- 
tended hearings  this  joint  sub-committee  of  the  Senate  and  House, 
reported  a  bill  to  the  full  committee  of  the  Senate  and  House  on 
Banking  and  Currency  May  12,  1914.     This  bill  provided  for  the  land 


.    £>F  WE 

loan  type  of  bank  only,  with  a  gdvftriliiient-aid  fea'fcii^g/toji^ujfe^ident 
Wilson  opposed  government  aid  and  wanted  the  billtoTrrnVT^e  for  the 
personal  credit  type  of  bank  also.  The  hitch  caused  tne  Democratic 
caucus  to  drop  this  measure  from  the  ones  scheduled  to  be  acted  on 
by  Congress  during  the  spring  session  of  1914. 
What   Is  Rural  Credit? 

There  are  different  kinds  of  rural  credits: 

1 — Long  time  credit  based  on  land. 

2 — Short  time  credit  based  on  personal  security. 

3 — A  combination  of  the  two  under  one  system  of  regulation. 

Either  of  these  may  come  by  private  initiative  or  by  government 

subvention. 

There   is    cooperative    banking    that    is    not    rural    or    urban    but 

cosmopolitan. 

Either  Rural  or  Urban  Credits  may  or  may  not  be  cooperative. 

The  bill  reported  by  the  Committee  on  Rura^  Credits  provided  for 
a  system  of  banking  patterned  after  the  Federal  Reserve  Act  oi 
1913;  with  regional  Land  Banks  owned  by  local  Loan  Associations, 
individuals,  corporations  and,  if  not  otherwise  taken,  by  the  national 
government. 

The  loans  were  to  be  made  only  to  members  of  the  local  Loan 
Associations;  they  must  be  on  first  mortgages  on  farm  land  within 
the  district  of  the  association;  all  installments  to  be  made  by  amorti- 
zation payments;  the  time  to  be  between  five  and  thirty  years; 
allowing  the  debtor  to  extinguish  his  debt  by  cash  at  any  time  after 
five  years;  the  interest  not  to  exceed  the  legal  rate  of  the  state. 

Loans  to  be  made  for  the  purpose  of  liquidating  indebtdness; 
improvement  of  the  land;  equipment  of  the  farm;  for  the  purchase  oi 
a  home. 

Loans  to  be  limited  to  fifty  per  cent,  of  the  value  of  the  farm,  and 
twenty  five  percent  of  the  value  of  the  buildings  which  must  be 
insured  in  the  name  of  the  creditor;  loans  limited  to  bonafide  resident's, 
and  limited  to  a  maximum  of  $4,000  to  any  one  borrower  and  to 
twenty  percent  of  the  capital  and  surplus  of  the  association  making 
the  loan. 

The  capital  of  each  regional  Land  Bank  must  be  not  less  than 
$500,000. 

Their  powers  were  to  issue  and  sell  farm  loan  bonas;  to  invest 
funds  in  first  mortgages  on  real  estate;  to  receive  from  national  farm 
loan  associations  first  mortgages  on  land;  to  empower  the  loan  asso- 
ciation as  agents  and  collect  the  installments  and  other  sums  payable 
under  the  terms  of  the  mortgages  and  bonds  secured  thereby;  to 
deposit  funds  with  any  Federal  Reserve  Bank  or  member  "bank  of  th"" 
reserve  system;  to  accept  deposits  of  securities  or  current  funds 
from  its  member-bank  stockholders  only,  but  should  pay  no  interest  on 
deposits. 

These  land  banks  were  to  keep  one-fourth  of  the  net  earnings  as 
a  reserve,  after  which  the  n*t  earnings  may  be  declared  to  stock- 
holders up  to  six  percent,  which  should  be  cumulative;  all  excess 
earnings  above  six  percent  should  go  to  the  Federal  government. 

The  net  earnings  of  the  farm  loan  associations  shou'd  be  treated 
the  same  way  except  that  all  over  six  percent  should  go  to  the  reserve 
account. 

Every  Federal  land  bank  and  every  farm  loan  association  with 
all    their   possessions    and    transactions,    except    realty   owned    in    fee 

simple,   was  to  be   exempt  from   all  national   and   state  taxes. 

It  provided   for  the  use  of  postal   savings   funds   to  be  used   to 


purchase  farm  loan  bonds  in  lieu  of  U.  S.  bonds  or  other  securities; 
this  to  be  done  in  case  of  new  issues  at  the  discretion  of  the  Federal 
Reserve  Board,  or  if  old  issues  they  to  be  bought  only  on  condition 
that  they  were  below  par — thjs  to  help  keep  them  at  par. 

It  provided  that  the  Secretary  of  the  Treasury  should,  upon 
request  of  Federal  ^and  banks  and  upon  the  recommendation  of  the 
Federal  Reserve  Board,  purchase  from  the  Federal  land  banks  farm 
loan  bonds  not  previously  sqld,  in  any  amount  not  to  exceed  $50,000,000 
during  any  one  year. 

I  have  here  given  the  salient  features  of  the  ^aw  as  proposed  by 
the  joint  Senate  and  House  Committee  on  Rural  Credits  May  12,  191^ 

The  main  thing  in  securing  credit  on  favorable  terms  is  the 
proper  mobilization  of  security.  This  the  European  borrowers  have 
learned  to  do  on  the  mutual  or  cooperative  basis.  With  the  same 
mutual  trust,  and  minute  requirements  upon  the  part  of  the  members 
of  the  little  banks,  it  could  be  done  in  this  country.  If  we  have  not  the 
honor  among  us  to  back  up  mutual  security  we  pay  the  penalty  to  the 
usurer  and  make  our  resentments  known  by  complaining. 

The  task  of  building  a  rural  civilization  and  making  the 
rural  community  attractive  and  a  desirable  place  to  live  must  be  worked 
out  by  those  who  cast  their  lots  with  the  agricultural  class.  Social 
Utopias  cannot  be  handed  down  from  governments  or  philanthropists 
to  those  incapable  of  developing  it  from  within  their  own  ranks. 

This  government  will  respond  to  the  call  of  the  farmer  when  he 
votes  with  orders  attached. 


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